**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C. 20549**
 
  **FORM
        40-F**
 
 o Registration
        statement pursuant
        to Section 12 of the Securities Exchange Act of 1934
  or
  x Annual
        report pursuant to Section
        13(a) or 15(d) of the Securities Exchange Act of 1934
 
 For
        the
        fiscal year ended **December
        31, 2005**
  Commission
        File Number **000-32115**
  **ENTERRA
        ENERGY TRUST**
 (Exact
        name of registrant as specified in its charter)
 
 **Alberta**
                (Province
                  or Other Jurisdiction of Incorporation or Organization)
              **1311**
                (Primary
                  Standard Industrial Classification Code)
              **Not
                  Applicable**
                (I.R.S.
                  Employer
                Identification
                  No.)
 
 **Suite
        2600, 500 - 4** **th** **Avenue S.W.**
 **Calgary,
        Alberta**
 **Canada,
        T2P 2V6**
 **(403)
        263-0262**
 (Address
        and telephone number of registrant’s principal executive offices)
  
 **DL
                  Services, Inc.**
                **1420
                  Fifth Avenue, Suite 3400**
                **Seattle,
                  Washington 98101**
                **(206)
                  903-8800**
                (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, no par value**
              **Toronto
                  Stock Exchange**
                **New
                  York Stock Exchange**
  Securities
        registered or to be registered pursuant to Section 12(g) of the
        Act:
  Securities
        for which there is a reporting obligation pursuant to Section 15(d) of the
        Act: **None**
  For
        annual reports, indicate by check mark the information filed with this
        form:
  x Annual
        Information Form    x 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. **Trust
        Units, without par value at December 31, 2005:**
 **______________________________________**
  Indicate
        by check mark whether the Registrant by 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, indicate the filing number assigned to the Registrant in
        connection with such Rule.  o Yes   x No
   Indicate
        by check mark whether the Registrant (1) has filed all reports required 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 such filing requirements for the past
        90
        days.  x Yes  o No
  
 **Explanatory
        Note:**  **Enterra
        Energy Trust** (the
        “Registrant”) is a Canadian issuer that is permitted, under a
        multijurisdictional disclosure system adopted in the United States, to prepare
        its Annual Report pursuant to Section 13 of the Securities Exchange Act of
        1934 (the “1934 Act”) in accordance with disclosure requirements in effect in
        Canada which differ from those of the United States. The Registrant is a
        “foreign private issuer” as defined in Rule 3b-4 under the 1934 Act and in
        Rule 405 under the Securities Act of 1933. Equity securities of the
        Registrant are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f)
        and 16 of the 1934 Act pursuant to Rule 3a12-3.
  **CAUTIONARY
        STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**
  This
        Annual Report on Form 40-F and the Exhibits included herein contain
        forward-looking statements concerning the Registrant’s plans for drilling,
        exploration and development, business strategy and plans and objectives of
        management for future operations. Other forward-looking statements relate
        to the
        Registrant’s future financial position, estimated amounts and timing of capital
        expenditures, royalty rates and exchange fees relate to analyses and other
        information that are based on forecasts of future results, estimates of amounts
        not yet determinable and assumptions of management. Any statements that express
        or involve discussions with respect to predictions, expectations, beliefs,
        plans, projections, objectives, assumptions or future events or performance
        (often, but not always, using words or phrases such as “expects”, “is expected”,
“anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”
“strategy”, “goals”, “objectives”, “potential” or variations thereof or stating
        that certain actions, events or results “may”, “could”, “would”, “might” or
“will” be taken, occur or be achieved, or the negative of any of these terms and
        similar expressions) are not statements of historical fact and may be
“forward-looking statements.”
  Statements
        concerning oil and gas reserves contained in this report may be deemed to
        be
        forward-looking statements as they involve the implied assessment that the
        resources described can be profitably produced in the future, based on certain
        estimates and assumptions.
  Forward-looking
        statements are subject to a variety of known and unknown risks, uncertainties
        and other factors that could cause actual events or results to differ from
        those
        reflected in the forward-looking statements, including, without
        limitation:
  ·
              The
                  risks of the oil and gas industry, such as operational risks in
                  exploring
                  for, developing and producing crude oil and natural
                  gas;
  ·
              market
                  demand;
  ·
              risks
                  and uncertainties involving geology of oil and gas
                  deposits;
  ·
              uncertainty
                  of capital costs, operating costs, production and economic
                  returns;
  ·
              the
                  uncertainty of reserve estimates and reserves
                  life;
  ·
              the
                  uncertainty of estimates and projections relating to production,
                  costs and
                  expenses;
  ·
              potential
                  delays or changes in plans with respect to exploration or development
                  projects or capital expenditures;
  ·
              fluctuations
                  in oil and gas prices, foreign currency exchange rates and interest
                  rates;
  ·
              health,
                  safety and environmental risks;
  ·
              uncertainties
                  as to the availability and cost of financing;
  ·
              the
                  possibility that government policies or laws may change or governmental
                  approvals may be delayed or
                  withheld;
  ·
              the
                  Registrant’s ability to attract and retain qualified management;
                  and
  ·
              commodity
                  price fluctuations.
  
 Other
        sections of this report may include additional factors that could adversely
        affect the Registrant’s business and financial performance. Moreover, the
        Registrant operates in a very competitive and rapidly changing environment.
        New
        risk factors emerge from time to time and it is not possible for management
        to
        predict all risk factors, or assess the impact of all factors on the business
        or
        the extent to which any factor, or combination of factors, may cause actual
        results to differ materially from those contained in any forward-looking
        statements.
  The
        Registrant's forward-looking statements are based on the beliefs, expectations
        and opinions of management on the date the statements are made, and the
        Registrant does not assume any obligation to update forward-looking statements
        if circumstances or management's beliefs, expectations or opinions should
        change. For the reasons set forth above, investors should not place undue
        reliance on forward-looking statements.
  **CURRENCY**
  Unless
        otherwise indicated, all dollar amounts in the Annual Report on Form 40-F
        are
        Canadian dollars. The exchange rate of Canadian dollars into United States
        dollars, based upon the noon rate of exchange as reported by the Bank of
        Canada,
        was U.S.$1.00 = CDN$1.17 on March 27, 2005 and was U.S.$1.00 = CDN$1.22 on
        March
        27, 2006.
 
 **ANNUAL
        INFORMATION FORM**
  The
        Registrant’s Annual Information Form for the fiscal year ended December 31, 2005
        is included herein as Exhibit 1.
  **AUDITED
        ANNUAL FINANCIAL STATEMENTS AND**
 **MANAGEMENT’S
        DISCUSSION AND ANALYSIS**
  *Audited
        Annual Financial Statements*
  For
        audited financial statements, including the report of the auditors with respect
        thereto, see Exhibit 2 included herein. The Registrant’s financial statements
        are prepared in accordance with Canadian generally accepted accounting
        principles (“GAAP”), which differs from United States GAAP, and is subject to
        Canadian auditing and auditor independence standards, and therefore may not
        be
        comparable to financial statements of United States companies. For a
        reconciliation of differences between Canadian and United States generally
        accepted accounting principles, see Note 22 - Differences Between Canadian
        and
        United States Generally Accepted Accounting Principles, of the notes to the
        financial statements.
  *Management’s
        Discussion and Analysis*
  For
        management’s discussion and analysis (“MD&A”) see Exhibit 3.
  *Tax
        Matters*
  Purchasing,
        holding or disposing of securities of the Registrant may have tax consequences
        under the laws of the United States and Canada that are not described in
        this
        Annual Report on Form 40-F.
  II-2
  **DISCLOSURE
        CONTROLS AND PROCEDURES**
  As
        of the
        end of the period covered by this Annual Report on Form 40-F, the Registrant
        carried out an evaluation, under the supervision of the Registrant’s Chief
        Executive Officer and Chief Financial Officer, of the effectiveness of the
        Registrant’s disclosure controls and procedures pursuant to Rules 13a-15(e)
        and 15d-15(e) of the 1934 Act. Based upon that evaluation, the Registrant’s
        Chief Executive Officer and Chief Financial Officer have concluded that,
        as of
        the end of the period covered by this Annual Report on Form 40-F, the
        Registrant’s disclosure controls and procedures are effective to ensure that
        information required to be disclosed by the Registrant in reports that it
        files
        or submits under the Exchange Act is (i) recorded, processed, summarized
        and
        reported within the time periods specified in Securities and Exchange Commission
        rules and forms, and (ii) accumulated and communicated to the Registrant’s
        management, including its principal executive officer and principal financial
        officer, to allow timely decision regarding required disclosure.
  **CHANGES
        IN INTERNAL CONTROLS OVER FINANCIAL REPORTING**
  During
        the period covered by this Annual Report on Form 40-F, no changes occurred
        in
        the Registrant’s internal control over financial reporting that has materially
        affected, or is reasonably likely to materially affect, the Registrant’s
        internal control over financial reporting.
  **CODE
        OF ETHICS FOR DIRECTORS, OFFICERS, EMPLOYEES AND
        CONSULTANTS**
  The
        Registrant has adopted a Code of Ethics which applies to all directors,
        officers, employees and consultants. It is available on the Registrant’s web
        site at *www.enterraenergy.com* and in
        print to any shareholder who requests it. All amendments to the code, and
        all
        waivers of the code with respect to any of the officers covered by it, will
        be
        posted on the Registrant’s web site, submitted on Form 6-K and provided in print
        to any shareholder who requests them.
  **AUDIT
        COMMITTEE**
  The
        Registrant’s Board of Directors has a separately-designated standing Audit
        Committee for the purpose of overseeing the accounting and financial reporting
        processes of the Registrant and audits of the Registrant’s annual financial
        statements. As of the date of the Annual Report on Form 40-F for the year
        ended
        December 31, 2005, the following individuals comprise the entire membership
        of
        the Registrant’s Audit Committee, which has been established in accordance with
        Section 3(a)(58)(A) of the Exchange Act:
  Mr.
        William E. Sliney
 Mr.
        H.S.
        (Scobey) Hartley
 Mr.
        Norman Wallace
  *Audit
        Committee Financial Expert*
  Mr.
        Sliney has been determined by the Registrant to meet the audit committee
        financial expert criteria (as defined in Item 401 of Regulation S-K under
        the
        1934 Act) and has been designated as an audit committee financial expert
        for the
        Audit Committee. Mr. Sliney is independent as defined by the New York Stock
        Exchange (“NYSE”) Corporate Governance Rules.
  Each
          member of the audit committee and a majority of the board of directors
          is
          independent as defined by the NYSE Corporate Governance Rules.
   **CORPORATE
          GOVERNANCE LISTING STANDARDS**
  The
          Trust's corporate governance practices are subject to guidelines for effective
          corporate governance established by National Instrument 58-101
          and National Policy 58-201 (collectively, the "CSA Rules"). The Trust
          satisfies all of the New York Stock Exchange ("NYSE") corporate governance
          listing standards applicable to non-U.S. companies and complies in many
          respects with the NYSE corporate governance listing standards applicable
          to
          U.S. companies.
   With
          respect to the NYSE corporate governance listing standards, the Trust's
          corporate governance practices differ in only a number of respects from
          those
          applicable to U.S. companies. First, the NYSE listing standards require
          shareholder approval of all equity compensation plans and any material
          revisions
          to such plans, regardless of whether the securities to be delivered under
          such
          plans are newly issued or purchased on the open market, subject to a few
          limited
          exceptions. In contrast, the TSX rules require shareholder approval of
          equity
          compensation plans only when such plans involve newly issued securities.
          Equity
          compensation plans that do not provide for a fixed maximum number of securities
          to be issued must have a rolling maximum number of securities to be issued
          based
          on a fixed percentage of the issuer's outstanding securities and must also
          be
          approved by shareholders every three years. If the plan provides a procedure
          for
          its amendment, the TSX rules require shareholder approval of amendments
          only
          where the amendment involves a reduction in the exercise price or an extension
          of the term of options held by insiders. Secondly, the NYSE listing standards
          require that any waivers of a company's code of business conduct and ethics
          for
          directors or executive officers be promptly disclosed. The Trust complies
          with
          the requirements of the CSA Rules which specify that material departures
          from
          the Policy on Business Conduct and Ethics by a director or executive officer
          which constitute a material change to the Trust will be promptly disclosed
          to
          shareholders. Third, the NYSE listing standards require that the Audit
          Committee
          charter specify that the Audit Committee assist the Board of Directors
          in its
          oversight of the Trust's compliance with legal and regulatory requirements.
          The
          Trust's Board oversees the Trust's compliance with legal and regulatory
          requirements. Each of the Board committees assists the Board in its oversight
          of
          the Trust's compliance with legal and regulatory requirements in each of
          their
          areas of responsibility. Fourth, the NYSE listing standards require that
          the
          corporate governance committee be comprised solely of independent directors.
          Keith Conrad, our Chief Executive Officer, is a member of that committee.
          Fifth,
          the NYSE listing standards require that the compensation committee be comprised
          solely of independent directors. Reg Greenslade, who in not considered
          independent, is a member of that committee. However, as of April 1, 2006,
          Mr.
          Greenslade will no longer be a member of that committee. Finally, the NYSE
          listing standards require that non-management directors meet at regularly
          scheduled executive sessions without management. Our non-management directors
          do
          not have such regularly scheduled executive sessions without management.
  **Disclosure
          of Reserves Data**
  As
          a
          Canadian issuer, we are required under Canadian law to comply with National
          Instrument 51-101 *"Standards of Disclosure for Oil and Gas Activities"* ("NI
          51-101") issued by the Canadian Securities Administrators, in all of our
          reserves related disclosures.
  In
          the
          United States however, registrants, including foreign private issuers like
          us,
          are generally required to disclose proved reserves using the standards
          contained
          in the United States Securities and Exchange Commission ("SEC") Regulation
          S-X.
          Under certain circumstances, applicable U.S. law permits us to comply with
          our
          own country's law if the requirements vary.  The primary difference between
          the two standards is the additional requirement under NI 51-101 to disclose
          both
          proved and proved plus probable reserves as well as related future net
          revenues
          using forecast prices and costs.  Another difference lies in the definition
          of proved reserves.  As discussed in the Canadian Oil and Gas Evaluation
          Handbook ("COGE Handbook"), the standards which NI 51-101 employs, the
          difference in estimated proved reserves based on constant pricing and costs
          between the two standards is not material.
  II-3
  **PRINCIPAL
        ACCOUNTING FEES AND SERVICES - INDEPENDENT AUDITORS**
  The
        table
        setting forth the Registrant’s fees paid to its independent auditor, KPMG LLP
        for the years ended December 31, 2004 and December 31, 2005 are set forth
        below:
  Years
                  ended December 312005
              
              2004Audit:
              
              $
              410,560
              
              $
              309,116Audit
                  Related:
              
              $
              316,992
              
              $
              5,000Tax
              
              $
              40,500
              
              $
              12,500All
                  Other Fees
              
              
              -
              
              
              -Total
              
              $
              768,052
              
              $
              326,616
 
 “Audit
        Fees” are the aggregate fees billed by KPMG
        LLP
        and Deloitte & Touche LLP for
        the
        audit of the Registrant’s annual consolidated financial statements and reviews
        of the Registrant's interim consolidated financial statements.
 
 “Audit-Related
        Fees” are fees charged by KPMG
        LLP
        in conjunction with statutory and regulatory filings such as prospectus and
        information circulars .
 
 “Tax
        Fees” are fees for professional services rendered by KPMG
        LLP for
        reviews of tax statements regarding distributions.
 
 Fees
        disclosed under the category “All Other Fees” for the 2005 and 2004 fiscal years
        were $0.
  **PRE-APPROVAL
        OF AUDIT AND NON-AUDIT SERVICES PROVIDED BY**
 **INDEPENDENT
        AUDITORS**
  For
        information regarding the Audit Committee’s pre-approval procedures and
        policies, see “Audit Committee” in the Registrant’s Annual Information Form
        filed as Exhibit 1 to this Annual Report on Form 40-F.
  **OFF-BALANCE
        SHEET ARRANGEMENTS**
  The
        Registrant has not entered into any off-balance sheet arrangements other
        than
        operating leases.
  **TABLE
        OF CONTRACTUAL COMMITMENTS**
  The
        following table lists as of December 31, 2005 information with respect to
        the
        Registrant’s known contractual obligations.
 
 Payments
                  due by period (in 000’s)***Contractual
                  Obligations***
              ***Total***
              ***Less
                  than 1 year***
              ***1-
                  3 years***
              ***3
                  - 5 years***
              ***More
                  than 5 years***Short-Term
                  Debt Obligations
              $99,521
              $99,521
              $-
              $-
              $-Interest
                on
                above debt
              5,011
              5,011
              -
              -
              -Long-Term
                  Debt Obligations
              -
              -
              -
              -
              -Capital
                  (Finance) Lease Obligations
              2,864
              1,065
              1,799
              --
              --Operating
                  Lease Obligations
              5,654
              1,160
              2,140
              2,257
              97Purchase
                  ObligationsOther
                  Long-Term Liabilities Reflected on the Registrant's Balance Sheet
                  under
                  Canadian GAAP
              24,323
              -
              -
              -
              24,323Total
              $137,373
              $106,757
              $3,939
              $2,257
              $24,420
 
  II-4
 For
        additional information related to the Registrant’s contractual obligations and
        commitments see Note 17 in the Registrant’s consolidated financial statements
        (Exhibit 2).
  **UNDERTAKING
        AND CONSENT TO SERVICE OF PROCESS**
  *Undertaking*
  The
        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 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.
  *Consent
        to Service of Process*
  The
        Registrant filed an Appointment of Agent for Service of Process and Undertaking
        on Form F-X signed by the Registrant and its agent for service of process
        on
        November 10, 2005 with respect to the class of securities in relation to
        which
        the obligation to file the Form 40-F arises, which Form F-X is incorporated
        herein by reference.
  **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 on Form 40-F to be signed on its behalf by the undersigned, thereunto
        duly authorized.
  **ENTERRA
                ENERGY CORP., AS ADMINISTRATOR OF ENTERRA ENERGY
                TRUST**/s/ Keith
                ConradKeith
                  Conrad
                President and Chief Executive OfficerDate:
                March 30, 2006
   II-5
  **EXHIBIT
        INDEX**
  The
        following exhibits have been filed as part of the Annual Report on Form 40-F
        :
  Exhibit
              Description**Annual
                  Information**1
              Annual
                  Information Form of the Registrant for fiscal year ended December
                  31,
                  20052
              Audited
                  consolidated financial statements of the Registrant and notes thereto
                  for
                  the years ended December 31, 2005, 2004 and 2003, together with
                  the report
                  of the auditors thereon3
              Management’s
                  Discussion and Analysis for the year ended December 31, 2005**Certifications**4
              Certifications
                  by the Chief Executive Officer of the Registrant pursuant to
                  Rule 13a-14(a) of the Exchange Act, as adopted pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002.5
              Certifications
                  by the Chief Financial Officer of the Registrant pursuant to
                  Rule 13a-14(a) of the Exchange Act, as adopted pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002.6
              Certificate
                  of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350,
                  as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 20027
              Certificate
                  of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,
                  as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**Consents**8
              Consent
                  of KPMG LLP9
              Consent
                  of McDaniel & Associates Consultants Ltd.10
              Consent
                  of Sproule Associates Inc**.**




**Enterra
          Energy Trust**
       **Annual
          Information Form**
   **For
          the year ended December 31, 2005**
      
  **March
          31, 2006**
      
  **TABLE
          OF CONTENTS**
 Glossary
                  
                  
                  1Abbreviations,
                      Conventions and Conversions
                  
                  
                  4Abbreviations
                  
                  
                  4Conventions
                  
                  
                  4Conversions
                  
                  
                  4Exchange
                      Rate Information
                  
                  
                  5Note
                      Regarding Forward Looking Statements
                  
                  
                  6Structure
                      of Enterra Energy Trust
                  
                  
                  7Enterra
                      Energy Trust
                  
                  
                  7Enterra
                      Energy Commercial Trust
                  
                  
                  7Enterra
                      Energy Corp.
                  
                  
                  7Enterra
                      Production Partnership
                  
                  
                  7Rocky
                      Mountain Acquisition Corp.
                  
                  
                  7Organizational
                      Chart
                  
                  
                  8General
                      Developments of Enterra Energy Trust
                  
                  
                  9Historical
                      Overview
                  
                  
                  9Operational
                      Information
                  
                  
                  11Overview
                  
                  
                  11Personnel
                  
                  
                  11*Risk
                      Management*
                  
                  
                  11*Credit
                      Risk*
                  
                  
                  11*Foreign
                      Exchange Risk*
                  
                  
                  11*Commodity
                      price risk*
                  
                  
                  11*Interest
                      Rate Risk*
                  
                  
                  12*Summary
                      of Risk Sensitivities*
                  
                  
                  12*Revenue
                      Sources*
                  
                  
                  12Statement
                      of Reserves Data and Other Oil and Gas Information
                  
                  
                  13Disclosure
                      of Reserves Data
                  
                  
                  13Oil
                      and Natural Gas Reserves and Net Present Value of Future Net
                      Revenue
                  
                  
                  13Reserves
                      Data - Constant Prices and Costs
                  
                  
                  14Reserves
                      Data - Forecast Prices and Costs
                  
                  
                  17Undeveloped
                      Reserves
                  
                  
                  23Significant
                      Factors or Uncertainties Affecting Reserves Data
                  
                  
                  23Future
                      Development Costs
                  
                  
                  24Common
                      Infrastructure Costs
                  
                  
                  24Oil
                      and Gas Properties
                  
                  
                  24Oil
                      and Gas Wells
                  
                  
                  27Land
                      Holdings
                  
                  
                  27Abandonment
                      and Reclamation Costs
                  
                  
                  27Tax
                      Horizon
                  
                  
                  27Costs
                      Incurred
                  
                  
                  27Exploration
                      and Development Activities
                  
                  
                  28Production
                      Volume by Field
                  
                  
                  28Production
                      Estimates
                  
                  
                  29Quarterly
                      Data
                  
                  
                  30Additional
                      Information respecting Enterra Energy Trust
                  
                  
                  31The
                      Trust Indenture
                  
                  
                  31Trust
                      Units and Other Securities
                  
                  
                  31*Trust
                      Units*
                  
                  
                  31Income
                      Streams
                  
                  
                  32Unitholder
                      Limited Liability
                  
                  
                  32Issuance
                      of Trust Units
                  
                  
                  33Trustee
                  
                  
                  33Delegation
                      of Authority, Administration and Trust Governance
                  
                  
                  33Liability
                      of The Trustee
                  
                  
                  34Special
                      Voting Rights
                  
                  
                  34Redemption
                      Right
                  
                  
                  34Meetings
                      of Unitholders
                  
                  
                  35Exercise
                      of Voting Rights
                  
                  
                  36
  i
  Amendments
                      to the Trust Indenture
                  
                  
                  36Takeover
                      Bid
                  
                  
                  37Termination
                      of the Trust
                  
                  
                  37Reporting
                      to Unitholders
                  
                  
                  37Additional
                      Information of Enterra Energy
                  
                  
                  38Directors
                      and Officers
                  
                  
                  38Description
                      of Securities
                  
                  
                  40Voting
                      and Exchange Trust Agreement
                  
                  
                  43Support
                      Agreement
                  
                  
                  44General
                  
                  
                  46Risk
                      Factors
                  
                  
                  47Distributions
                      to Unitholders
                  
                  
                  57Market
                      for Securities
                  
                  
                  58Trading
                      Price and Volume
                  
                  
                  58Prior
                      Sales of Non-Listed Securities
                  
                  
                  58Legal
                      Proceedings
                  
                  
                  59Interest
                      of Management and Others in Material Transactions
                  
                  
                  59Transfer
                      Agent and Registrar
                  
                  
                  59Material
                      Contracts
                  
                  
                  59Interests
                      of Experts
                  
                  
                  59Audit
                      Committee
                  
                  
                  59General
                  
                  
                  59Mandate
                      of the Audit Committee
                  
                  
                  59Relevant
                      Education and Experience of Audit Committee Members
                  
                  
                  60Audit
                      Committee Oversight
                  
                  
                  61Additional
                      Information
                  
                  
                  61Appendix
                      "A" - Audit Committee Charter
                  
                  
                  61Organization
                  
                  
                  61Statement
                      of Policy
                  
                  
                  62Responsibilities
                  
                  
                  62Appendix
                      "B-1" - Report on Reserves Data by Independent Qualified Reserves
                      Evaluator or Auditor
                  
                  
                  64Appendix
                      "B-2" - Report on Reserves Data by Independent Qualified Reserves
                      Evaluator or Auditor
                  
                  
                  65Appendix
                      "C" - Report of Management and Directors on Reserve Data and
                      Other
                      Information
                  
                  
                  66Appendix
                      "D" - Cease Trade Orders, Bankruptcies, Penalties or
                      Sanctions
                  
                  
                  67
  ii
  **Glossary**
  The
          following are defined terms used in this annual information form:
  " **2** **nd** **Amended and Restated Agreement of Business Principles** " **** means
          the
          Amended and Restated Agreement of Business Principles among the Trust,
          JED and
          JMG, dated effective September 1, 2003 as between the Trust and JED and
          August
          1, 2004 as among the Trust, JED and JMG;
  " **Board
          of Directors** "
          means
          the board of directors of Enterra Energy Corp.;
  " **CT
          Notes** "
          means
          the unsecured promissory notes issued by EECT to the Trust;
  " **EEC
          Exchangeable Shares** "
          means
          exchangeable shares issued by Enterra Energy, which may be exchanged for
          Trust
          Units;
  " **EECT** "
          means
          Enterra Energy Commercial Trust, an unincorporated trust governed by the
          laws of
          Alberta and a wholly owned subsidiary of the Trust;
  " **EECT
          Units** "
          means
          trust units of EECT;
  " **Enterra",
          "we", "us", "our", or "Trust"** means
          Enterra Energy Trust and where the context requires includes the Trust
          and all
          of the Trust Subsidiaries as a consolidated entity;
  " **Enterra
          Arrangement** " **** means
          the
          plan of arrangement completed on November 25, 2003 involving the Trust,
          EECT,
          Old Enterra and its subsidiaries, and Enterra Acquisition Corp.;
  " **Enterra
          Debt** "
          means
          the notes and any other indebtedness of the Operating Subsidiaries to the
          Trust
          from time to time;
  " **Enterra
          Energy** " **or** " **EEC** "
          means
          Enterra Energy Corp., a corporation incorporated under the laws of Alberta
          and a
          wholly owned subsidiary of Enterra or the Trust, and administrator of the
          Trust
          pursuant to an administration agreement between the Trust and Enterra Energy
          dated November 25, 2003;
  " **Exchangeco** "
          means
          Enterra Exchangeco Ltd., a corporation incorporated under the laws of Alberta
          and a wholly owned subsidiary of EECT; " **Enterra
          US Acqco** "
          means
          Enterra US Acquisitions Inc, a corporation organized under the laws of
          the state
          of Washington and an indirect subsidiary of the Trust;
  " **EPP** "
          means
          the Enterra Production Partnership, a partnership organized pursuant to
          the laws
          of Alberta;
  " **Exchangeable
          Shares** " **** means
          exchangeable shares issued by Trust Subsidiaries and include where the
          context
          requires the EEC Exchangeable Shares, RMAC Exchangeable Shares and RMG
          Exchangeable Shares;
  " **GAAP** "
          means
          generally accepted accounting and principles in Canada;
  " **High
          Point** "
          means
          High Point Resources Inc.;
  " **High
          Point Arrangement** "
          means
          the plan of arrangement completed on August 17, 2005 involving High Point
          Resources Inc. and its subsidiaries, Enterra Energy II Partner Corp., RMAC
          and
          the shareholders of High Point Resources Inc.;
  " **High
          Point Voting and Exchange Trust Agreement** "
          means
          the voting and exchange trust agreement entered into on August 17, 2005
          between the Trust, EECT, RMAC, Enterra Exchangeco Ltd. and Olympia Trust
          Company;
  " **JED** "
          means
          JED Oil Inc., a corporation incorporated under the laws of Alberta;
  " **JMG** "
          means
          JMG Exploration, Inc., a corporation incorporated under the laws of
          Nevada;
  " **Joint
          Services Agreement** "
          means
          the agreement entered into between the Trust and JED, and the Trust and
          JMG on
          January 1, 2006 to replace the terminated Technical Services
          Agreement;
  " **McDaniel** "
          means
          McDaniel & Associates Consultants Ltd., independent petroleum engineering
          consultants;
  " **McDaniel
          Report** "
          means
          the independent engineering evaluation of certain oil, NGL and natural
          gas
          interests of the Trust prepared by McDaniel dated February 13, 2006 and
          effective December 31, 2005;
  -1-
  " **Non-Resident** "
          means
          (a) a person who is not a resident of Canada for the purposes of the Tax
          Act and any applicable income tax convention; or (b) a partnership that is
          not a Canadian partnership for the purposes of the Tax Act;
  " **Old
          Enterra** "
          means
          Enterra Energy Corp. prior to the Enterra Arrangement;
  " **Operating
          Subsidiaries** "
          means
          collectively, the direct and indirect subsidiaries of the Trust that own
          and
          operates assets for the benefit of the Trust (with the material Operating
          Subsidiaries being Enterra Energy, EPP, RMAC, and Enterra US
          Acqco);
  " **RMAC
          Exchangeable Shares** "
          means
          exchangeable shares issued by RMAC, which may be exchanged for Trust Units;
  " **RMEC** "
          means
          the Rocky Mountain Energy Corp., a corporation created by amalgamation
          under the
          laws of Alberta;
  " **RMG
          Acquisition** "
          means
          the completion of the acquisition of Rocky Mountain Gas, Inc. **("RMG")** on
          June
          1, 2005;
  " **RMG
          Exchangeable Shares** "
          means
          exchangeable shares issued by Enterra US Acquisitions Inc., which may be
          exchanged for Trust Units;
  " **Series
          Notes** "
          means
          interest bearing subordinated promissory notes issued by certain Operating
          Subsidiaries and currently held by the Trust;
  " **Special
          Resolution** "
          means a
          resolution passed as a special resolution at a meeting of holders of Trust
          Units
          and holders of Special Voting Rights (including an adjourned meeting) duly
          convened for the purpose and passed by the affirmative votes of the holders
          of
          not less than 66 2/3% of the Trust Units and Special Voting Rights represented
          at the meeting;
  " **Sproule** "
          means
          Sproule Associates Inc., independent petroleum engineering consultants;
  " **Sproule
          Report** "
          means
          the independent engineering evaluation by Sproule of certain oil, NGL and
          natural gas interests of RMG effective December 31, 2005;
  " **Special
          Voting Right** "
          means
          the special voting right of the Trust issued by the Trust to and deposited
          with
          the Trustee, which, entities the holders of the EEC Exchangeable Shares
          to a
          number of votes at meetings of the Trust Unitholders as determined in the
          Voting
          and Exchange Trust Agreement;
  " **Support
          Agreement** "
          means
          that certain support agreement made between the Trust and EEC;
  " **Tax
          Act** "
          means
          the Income Tax Act (Canada) and the Regulations thereunder, as amended
          from time
          to time;
  " **Technical
          Services Agreement** "
          means
          the Technical Services Agreement dated effective January 1, 2004, between
          Enterra and JED;
  " **Trust** "
          means
          Enterra Energy Trust;
  " **Trust
          Indenture** "
          means
          the amended and restated trust indenture dated November 25, 2003 among
          Olympia
          Trust Company, as trustee, Luc Chartrand as settler, and Enterra Energy,
          as may
          be amended, supplemented, and restated from time to time;
  " **Trust
          Subsidiaries** "
          means
          the Operating Subsidiaries, EECT, and any other subsidiaries of the Trust;
  " **Trust
          Units** "
          means
          units of the Trust;
  " **Trustee** "
          means
          the trustee of Enterra, presently Olympia Trust Company;
  " **Unitholders** "
          mean
          holders from time to time of the Trust Units;
  " **U.S.
          Person** "
          means a
          U.S. person as defined in Rule 902(k) under Regulation S, including, but
          not
          limited to, any natural person resident in the United States;
  -2-
  " **U.S.
          Unitholder** "
          means
          any Unitholder who is either in the United States or a U.S. Person;
  " **Voting
          and Exchange Trust Agreement** "
          means
          the voting and exchange trust agreement entered into between the Trust
          and EEC,
          and Olympia Trust Company; and
  " **Voting
          and Exchange Trust Agreement Trustee** "
          means
          Olympia Trust Company, the initial trustee under the Voting and Exchange
          Trust
          Agreement, or such other trustee from time to time appointed
          thereunder.
  -3-
  **Abbreviations,
          Conventions and Conversions**
  **Abbreviations** ****
 Bbl
                barrel
                Mcf
                thousand
                    cubic feetBbls
                barrels
                Mmcf
                million
                    cubic feetMbbl
                thousand
                    barrels
                Bcf
                billion
                    cubic feetbbl/d
                barrels
                    per day
                mcf/d
                thousand
                    cubic feet per dayNGLs
                natural
                    gas liquids
                mmcf/d
                million
                    cubic feet per dayGJ
                gigajoule
                MMBTU
                million
                    British Thermal UnitsGJ/d
                gigajoule
                    per day
 
  AECO-C
                Intra-Alberta
                    Nova Inventory Transfer Price (NIT net price)API
                American
                    Petroleum Institute°API
                an
                    indication of the specific gravity of crude oil measured on the
                    API
                    gravity scale. Liquid petroleum with a specified gravity of 28°API or
                    higher is generally referred to as light crude oilARTC
                Alberta
                    Royalty Tax CreditBOE
                barrel
                    of oil equivalent of natural gas and crude oil (Disclosure provided
                    herein
                    in respect to BOE may be misleading, particularly if used in
                    isolation. A
                    BOE conversion ratio of 6 mcf:1 bbl is based on an energy equivalent
                    conversion method primarily applicable at the burner tip and
                    does not
                    represent a value equivalent at the wellhead.)BOE/d
                barrel
                    of oil equivalent per dayM3
                cubic
                    metresMboe
                1,000
                    barrels of oil equivalentWTI
                West
                    Texas Intermediate, the reference price paid in U.S. dollars
                    at Cushing,
                    Oklahoma for crude oil of standard gradeMW/h
                Megawatts
                    per hour
  **Conventions**
 Unless
          otherwise indicated, all dollar amounts are in Canadian dollars and references
          herein to "$" or "dollars" are to Canadian dollars.
  The
          information set out in this annual information form is stated as at December
          31,
          2005 unless otherwise indicated. Capitalized terms used but not defined
          in the
          text are defined in the Glossary.
  **Conversions**
 The
          following table sets forth certain standard conversions from Standard Imperial
          Units to the International System of Units (or metric units):
  **To
                    Convert from**
                **To**
                **Multiply
                    by**Mcf
                Cubic
                    metres
                28.174Cubic
                    metres
                Cubic
                    feet
                35.494Bbls
                Cubic
                    metres
                0.159Cubic
                    metres
                Bbls
                    oil
                6.290Feet
                Metres
                0.305Metres
                Feet
                3.281Miles
                Kilometres
                1.609Kilometres
                Miles
                0.621Acres
                Hectares
                0.4047Hectares
                Acres
                2.471
  -4-
  **Exchange
          Rate Information**
 Except
          where otherwise indicated, all dollar amounts in this Annual Information
          Form
          are stated in Canadian dollars. The following table sets forth the US/Canada
          exchange rates on the last trading day of the years indicated as well as
          the
          high, low and average rates for such years. The high, low and average exchange
          rates for each year were identified or calculated from spot rates in effect
          on
          each trading day during the relevant year. The exchange rates shown are
          expressed as the umber of US dollars required to purchase one Canadian
          dollar.
          These exchange rates are based on those published on the Bank of Canada's
          website as being in effect at approximately noon on each trading day (the
          "Bank
          of Canada noon rate").
  **Year
                    Ended December 31****2005**
                
                **2004**
                
                **2003**Year
                    End
                0.8577
                
                0.8308
                
                0.7738High
                0.86090
                
                0.8493
                
                0.7738Low
                0.7872
                
                0.7159
                
                0.6350Average
                0.8258
                
                0.7697
                
                0.7156
 
 -5-
  **Note
          Regarding Forward Looking Statements**
  Certain
          statements contained in this annual information form and in 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 such forward looking statements.
          Management believes the expectations reflected in those forward looking
          statements are reasonable but no assurance can be given that these expectations
          will prove to be correct and such forward looking statements included herein
          should not be unduly relied upon. These statements speak only as of the
          date
          hereof.
  In
          particular, this annual information form contains forward-looking statements
          pertaining to the following:
  ·
                oil
                    and natural gas production levels;
  ·
                capital
                    expenditure programs;
  ·
                the
                    quantity of the oil and natural gas
                    reserves;
  ·
                projections
                    of commodity prices and costs;
  ·
                supply
                    and demand for oil and natural gas;
  ·
                expectations
                    regarding the ability to raise capital and to continually add
                    to reserves
                    through acquisitions and development;
                    and
  ·
                treatment
                    under governmental regulatory
                    regimes.
  The
          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 from:
  ·
                volatility
                    in market prices for oil and natural
                    gas;
  ·
                liabilities
                    inherent in oil and natural gas
                    operations;
  ·
                uncertainties
                    associated with estimating oil and natural gas
                    reserves;
  ·
                competition
                    for, among other things, capital, acquisitions of reserves, undeveloped
                    lands and skilled personnel;
  ·
                incorrect
                    assessments of the value of
                    acquisitions;
  ·
                geological,
                    technical, drilling and processing
                    problems;
  ·
                fluctuations
                    in foreign exchange or interest rates and stock market
                    volatility;
  ·
                failure
                    to realize the anticipated benefits of acquisitions;
                    and
  ·
                the
                    other factors discussed under "Risk
                    Factors".
  These
          factors should not be construed as exhaustive. We do not undertake any
          obligation to publicly update or revise any forward-looking
          statements.
  -6-
  **Structure
          of Enterra Energy Trust** ****
  **Enterra
          Energy Trust**
 Enterra
          is an oil and natural gas income trust established under the laws of the
          province of Alberta and pursuant to the Trust Indenture created as of November
          25, 2003. Enterra's assets consist of the securities of the Trust Subsidiaries
          and indirect interests in crude oil and natural gas properties through
          its
          Operating Subsidiaries. The Trust's principal and head office is located
          at
          Suite 2600, 500 - 4th Avenue S.W., Calgary, Alberta, Canada T2P 2V6. The
          Trustee's head office is located at Suite 2300, 125 - 9th Avenue S.E.,
          Calgary,
          Alberta, Canada T2G 0P6. Enterra's focus is to improve the quality of assets
          that underwrite the Unitholders' value and future distributions. The Trust
          pays
          monthly cash distributions on the 15th day of each month to Unitholders
          of
          record on the immediately preceding distribution record date. The business
          strategy is to maintain and enhance our oil and natural gas reserves to
          provide
          long-term sustainable cash distributions to Unitholders.
  **Enterra
          Energy Commercial Trust** ****
 EECT
          is
          an unincorporated commercial trust established by the laws of the province
          of
          Alberta. All of the issued and outstanding EECT Units are owned by the
          Trust.
          EECT, directly or indirectly, holds all of the outstanding shares and interests
          of the Operating Subsidiaries.
  **Enterra
          Energy Corp.** ****
 EEC
          is a
          corporation formed under the laws of the province of Alberta. EEC is one
          of the
          Operating Subsidiaries and was formed as a result of the completion of
          Enterra
          Arrangement. Pursuant to the Enterra Arrangement, former holders of common
          shares of Old Enterra received two trust units of the Trust or two EEC
          exchangeable shares, in accordance with the elections made by such holders,
          and
          Old Enterra became a wholly-owned subsidiary of the Trust. Old Enterra
          was
          subsequently amalgamated with Enterra Acquisition Corp., Big Horn Resources
          Ltd.
          and Enterra Sask. Ltd. to form EEC. At the same time, EEC became the
          administrator of the Trust pursuant to an administration agreement between
          the
          Trust and EEC.
  **Enterra
          Production Partnership**
 EPP
          was
          formed as a general partnership under the laws of the province of Alberta
          on
          August 16, 2001. The partners of the Partnership are EEC and Enterra Energy
          Partner Corp. EEC manages the operations of EPP.
  **Rocky
          Mountain Acquisition Corp.**
 RMAC
          is a
          corporation formed under the laws of Alberta. Some of the crude oil and
          natural
          gas properties and related assets in which the Trust has an indirect interest
          are held, directly or indirectly, through RMAC. As at January 1, 2006, High
          Point and its subsidiaries were amalgamated into RMAC. The amalgamated
          entity
          changed its name to Enterra Production Corp. See "General Developments
          of
          Enterra Energy Trust - *Acquisition
          of High Point Resources Inc.* ".
  -7-
  **Organizational
          Chart**
 The
          following chart illustrates the organization and structure of Enterra as
          at
          December 31, 2005:
  -8-
  **General
            Developments of Enterra Energy Trust** ****
  **Historical
            Overview**
 ***History
            of Old Enterra Prior to the Enterra Arrangement***
 Old
            Enterra (formerly, Westlinks Resources Ltd.) was organized on June 30,
            1998 by
            the statutory amalgamation of Temba Resources Ltd. and PTR Resources
            Ltd.
            pursuant to the provisions of the Business Corporations Act (Alberta).
            Temba
            Resources Ltd. was incorporated in Alberta on July 31, 1996. Immediately
            prior
            to the amalgamation, which created Old Enterra, Temba Resources Ltd.,
            amalgamated with its wholly owned subsidiary, Rainee Resources Ltd. PTR
            Resources Ltd. was incorporated in Alberta on September 18, 1992 as 542275
            Alberta Ltd., changed its name to Ablevest Holdings Ltd. on June 14,
            1993, and
            to PTR Resources Ltd. on December 1, 1997.
 
 ***The
            Enterra Arrangement***
 The
            Enterra Arrangement received the approval of 99.37% of the votes cast
            by
            shareholders at a special meeting held on November 24, 2003 as well as
            the
            approval of the Court of Queen's Bench of Alberta on November 24, 2003
            and
            became effective on November 25, 2003. Pursuant to the Enterra Arrangement,
            the
            outstanding common shares of Old Enterra were exchanged by the shareholders
            thereof for an aggregate of 18,951,556 Trust Units. In addition, as part
            of the
            Enterra Arrangement, Enterra Energy issued an aggregate of 2,000,000
            EEC
            Exchangeable Shares to former holders of Old Enterra common shares in
            accordance
            with elections made by such holders under the Enterra Arrangement. Each
            EEC
            Exchangeable Share may be exchanged into Trust Units at any time.
 
 The
            Trust
            Units commenced trading on the NASDAQ National Market System under the
            symbol
            "EENC" and the Toronto Stock Exchange ("TSX") under the symbol "ENT.UN"
            on
            November 28, 2003.
  ***2004
            Acquisition of assets***
 On
            January 30, 2004 the Trust completed the acquisition, from an unrelated
            oil and
            gas company, of properties in central Alberta. The purchase price, after
            final
            adjustments was $19.6 million. Upon closing, the acquisition added 1,800
            BOE/d
            of net production, consisting of 1,600 bbl/d of oil and 1,200 mcf/d of
            gas along
            with 22,166 gross acres of undeveloped land.
  ***Acquisition
            of Rocky Mountain Energy Corp.*** ****
 On
            September 29, 2004 the Trust, through its subsidiary RMAC, completed
            the
            acquisition of RMEC by way of a plan of arrangement whereby RMAC acquired
            all
            the issued and outstanding common shares of RMEC. The transaction was
            valued at
            approximately $50.3 million. RMEC shareholders received approximately
            86% of the
            consideration in the form of Trust Units and RMAC Exchangeable Shares
            and 14% in
            cash. The Trust and RMAC issued 1,946,576 Trust Units and 341,882 RMAC
            Exchangeable Shares, respectively. The acquisition of RMEC added approximately
            1,000 BOE/d of production to Enterra together with the potential to drill
            over
            22 additional wells.
  ***2005
            Acquisition of assets***
 On
            January 26, 2005, the Trust acquired certain oil and natural gas properties
            in
            east central Alberta for consideration of $12.1 million.
  ***Acquisition
            of Rocky Mountain Gas, Inc.***
 On
            June
            1, 2005, the Trust acquired 100% of the issued and outstanding shares
            of RMG, an
            entity with natural gas properties in Montana and Wyoming. RMG provides
            the
            Trust with future cash potential through the exploitation of coal bed
            methane on
            its undeveloped land as well as its currently producing assets. Results
            from
            operations of RMG subsequent to June 1, 2005 are included in the Trust's
            consolidated financial statements. The transaction was valued at approximately
            $24.0 million. The transaction was financed with 736,842 RMG Exchangeable
            Shares
            valued at $16.7 million, 275,474 Trust Units valued at $6.3 million and
            cash of
            $1.0 million.
 
 ***Acquisition
            of High Point Resources Inc.***
 On
            August
            17, 2005 the Trust completed the acquisition of 100% of the common shares
            of
            High Point through its subsidiary, RMAC, in exchange for 7,490,898 Trust
            Units
            and 1,407,177 RMAC Exchangeable Shares. High Point's oil and natural
            gas
            properties are predominantly in Alberta and British Columbia. The acquisition
            was completed to increase Enterra 's natural gas portfolio, provide strong
            cash
            flows and significant tax pools. For further information on this acquisition,
            see the following, each of which is available on SEDAR at www.sedar.com and is
            incorporated herein by reference:
  ·
                  the
                      audited consolidated financial statements of High Point as
                      at and for the
                      financial years ended December 31, 2004 and 2003 (including
                      comparative
                      year ended December 31, 2002), together with the notes thereto
                      and the
                      auditors' reports thereon;
  -9-
  ·
                  the
                      unaudited consolidated financial statements of High Point as
                      at and for
                      the six months ended June 30, 2005 (including the comparative
                      financial
                      statements contained therein) together with the notes thereto
                      respecting
                      such time period;
  ·
                  the
                      statement of reserves data and other oil and gas information
                      of High Point
                      presented on pages 11 to 28 of High Point's renewal annual
                      information
                      form dated March 21, 2005 for the year ended December 31,
                      2004;
  ·
                  the
                      recent developments disclosure of High Point presented on pages
                      50 to 54
                      of High Point's information circular and proxy statement dated
                      July 18,
                      2005 relating to the special meeting of shareholders held on
                      August 16,
                      2005; and
  ·
                  the
                      material change report of the Trust dated August 24, 2005 with
                      respect to
                      the completion of acquisition of High
                      Point.
  ***2006
            Acquisition of assets - Oklahoma***
 During
            the first quarter of 2006, the Trust acquired approximately 5,000 BOE/d
            of
            producing assets located in Oklahoma. The Trust expects to complete a
            final
            closing for additional working interests in the properties representing
            approximately 1,300 BOE/day. The assets consist of approximately 80%
            natural gas
            and 20% light oil and include over 53,000 net acres of land of which
            over 25,000
            net acres are undeveloped.
 
 The
            purchase price of USD $221.0 million was paid for through the issuance
            of
            5,178,792 Trust Units valued at USD $91.7 million, cash of USD $102.3
            million
            and USD $27.0 million of assumed debts. Certain post closing purchase
            price
            adjustment provisions remain in place, based on production rates achieved
            from
            the assets through September 19, 2006. The purchase price on the final
            closing
            of the additional working interests will be paid with a combination of
            units and
            cash.
 
 The
            current and anticipated production from these assets is from the Hunton
            Group
            carbonate formations, and is derived through a de-pressuring of the formation
            via water production followed by hydrocarbon production. The Hunton is
            exploited
            at depths of approximately 1,500 metres using long, multi-leg horizontal
            wells.
            The Trust will operate all of its production, gathering and water disposal
            facilities. A staff of approximately thirty will join the Trust when
            the final
            transactions are complete.
 
 Enterra
            has announced a farm out agreement with Petroflow Energy Ltd. to exploit
            the
            undeveloped Hunton prospects aggressively in 2006.
 
 All
            the
            developed and undeveloped lands are overlain by the Woodford Shale, which
            is
            speculated to be a prospective shale gas target similar to the Barnett
            Shale in
            Texas. Enterra's long term plans include testing of this concept. For
            further
            information of this acquisition, see the Trust's amended and restated
            material
            change report dated February 28, 2006, which is available on SEDAR at www.sedar.com and is
            incorporated herein by reference.
 
 ***Equity
            offerings***
 On
            January 16, 2004 Enterra entered into a financing agreement whereby it
            agreed to
            issue 1,650,000 Trust Units at a price of US$10.00 per unit for gross
            proceeds
            of US$16.5 million. The funds received from this financing were applied
            to pay
            down debt and for general corporate purposes. The financing closed on
            June 29,
            2004.
  On
            February 20, 2004 Enterra completed a private placement of 1,049,400
            Trust Units
            at a price of US$11.25 per unit for gross proceeds of US$11.8 million
            (US$10.3
            million net of financing costs). Funds received were applied to repay
            debt.
  On
            March
            4, 2005 Enterra completed a private placement of 500,000 Trust Units
            at a price
            of US$19.00 for gross proceeds of US$9.5 million. The funds received
            from this
            financing were applied to pay down debt and for general corporate
            purposes.
  On
            April
            22, 2005, Enterra entered into an equity line of credit arrangement with
            Kingsbridge Capital Limited whereby they has committed to purchase up
            to
            US$100.0 million of Trust Units in various draw downs at the option of
            the
            Trust. As at December 31, 2005, the Trust had issued 689,087 Trust Units
            for
            proceeds of Cdn$15.8 million.
  On
            December 20, 2005 the Trust filed a Prospectus Supplement for the issuance
            of up
            to 950,000 Trust Units at US$16.00 per unit. The issuances under the
            Prospectus
            Supplement had to be completed by January 13, 2006. The Trust issued
            882,500
            Trust Units under this supplement.
  -10-
  **Operational
            Information**
  **Overview**
  The
            Trust's operation strategy is to improve the quality of assets that underwrite
            the Unitholders' value and future distributions. The acquisition of High
            Point
            in August 2005 was the first significant step along this path. Rigorous
            processes have been and are being established to ensure strict cost
            accountability and regulatory compliance in all aspects of the business.
            These
            significant changes are ongoing in 2006.
  The
            Trust's business strategy is to maintain and enhance our oil and natural
            gas
            reserves to provide long-term sustainable cash distributions to Unitholders.
            The
            Trust uses a three-pronged strategy to achieve its goals through acquisition
            of
            producing properties with extensive potential for additional development
            upside,
            the use of strategic farm outs to develop these properties, and the pre-agreed
            acquisition from the farmee of the production resulting from these farm
            outs.
            Acquisitions are financed with cash flow, equity and with debt, the optimal
            mix
            being one that provides for the strongest balance sheet, and hence the
            maximum
            accretion of value to the Unitholders. The Trust's ability to replace
            and grow
            quality reserves using these strategies is a key success factor in our
            business
            outcomes.
  The
            Trust
            also looks over time to improve the efficiency of its portfolio via a
            focus on
            higher quality products such as light oil and natural gas, and through
            the
            rationalization of assets with higher operating costs. Future growth
            will be
            financed with a combination of retained cash flow from operating activities,
            drawing from our credit facilities, and the issuance of Trust Units.
            The level
            of distribution to Unitholders will fluctuate depending on a number of
            factors,
            including future commodity prices and operating results. The portion
            of cash not
            distributed to Unitholders will be used for maintenance of capital or
            reduction
            of bank debt.
  **Personnel**
 
 At
            December 31, 2005, Enterra employed 24 office employees and 33 field
            operations
            employees for a total of 57 employees.
  ***Risk
            Management***
 We
            are
            exposed to all of the normal risks inherent within the oil and gas sector,
            including commodity price risk, foreign-currency rate risk, interest
            rate risk
            and credit risk. We manage our operations in a manner intended to minimize
            our
            exposure to such risks.
  ***Credit
            Risk***
 Credit
            risk is the risk of loss resulting from non-performance of contractual
            obligations by a customer or joint venture partner. A substantial portion
            of
            Enterra's accounts receivable is with customers in the energy industry
            and is
            subject to normal industry credit risk. The Trust assesses the financial
            strength of its customers and joint venture partners through regular
            credit
            reviews in order to minimize the risk of non-payment.
  ***Foreign
            Exchange Risk***
 Enterra
            is exposed to market risk from changes in the exchange rate between U.S.
            and
            Canadian dollars. The price we receive for oil and natural gas production
            is
            based on a benchmark expressed in U.S. dollars, which is the standard
            for the
            oil and natural gas industry worldwide. Monthly distributions are also
            based on
            a value expressed in U.S. dollars. However, significant operating expenses,
            drilling expenses and general overhead expenses are incurred in Canadian
            dollars. Changes to the exchange rate between U.S. and Canadian dollars
            can
            adversely affect the Trust. When the value of the U.S. dollar increases,
            the
            Trust receives higher revenue and when the value of the U.S. dollar declines,
            the Trust receives lower revenue on the same amount of production sold
            at the
            same prices. Based on results of 2005, a change of $0.01 in the U.S.
            to Cdn
            dollar in 2006 would impact the Trust's earnings by approximately $1.9
            million
            and our cash provided by operating activities by $1.2 million.
  ***Commodity
            price risk***
 The
            financial condition, results of operations and capital resources of Enterra
            are
            highly dependent upon the prevailing market prices of oil and natural
            gas. These
            commodity prices are subject to wide fluctuations and market uncertainties
            due
            to a variety of factors that are beyond the Trust's control. Factors
            influencing
            oil and natural gas prices include the level of global demand for crude
            oil, the
            foreign supply of oil and natural gas, the establishment of and compliance
            with
            production quotas by oil exporting countries, weather conditions which
            determine
            the demand for natural gas, the price and availability of alternative
            fuels and
            overall economic conditions. It is impossible to predict future oil and
            natural
            gas prices with any degree of certainty. Sustained weakness in oil and
            natural
            gas prices may adversely affect the Trust's financial condition and results
            of
            operations, and may also reduce the amount of oil and natural gas reserves
            that
            the Trust can produce economically. Any reduction in the Trust's oil
            and natural
            gas reserves, including reductions due to price fluctuations, can have
            an
            adverse affect on the Trust's ability to obtain capital for our development
            activities. Similarly, any improvements in oil and natural gas prices
            can have a
            favourable impact on the Trust's financial condition, results of operations
            and
            capital resources. Based on the results of 2005, if the WTI oil price
            were to
            change by US$1.00 per bbl in 2006, the impact on earnings would be approximately
            $1.8 million and the impact on cash flow would be approximately $2.9
            million. If
            natural gas prices were to change by US$0.50 per mcf, the impact on earnings
            would be approximately $1.4 million and the impact on cash provided by
            operating
            activities would be approximately $2.3 million.
  -11-
  Enterra
            uses financial derivatives and physical sales contracts to mitigate a
            portion of
            oil and natural gas price risk. While the use of these derivative arrangements
            limits the downside risk of price declines, such use may also limit any
            benefits
            that may be derived from price increases.
  Enterra
            had several collars and forward contracts in place during the year in
            order to
            minimize the volatility in crude oil and natural gas pricing. Below is
            a summary
            of our hedging operations as of December 31, 2005:
  **Derivative
                      Instrument**
                  **Commodity**
                  **Price**
                  **Volume
                      (per day)**
                  **Period**Floors
                  Gas
                  9.65
                      to 9.80
                  10,000
                      GJ
                  January
                      1, 2006 - April 1, 2006Collars
                  Gas
                  8.50
                      to 14.00
                  10,000
                      GJ
                  April
                      1, 2006 - November 1, 2006Collars
                  Oil
                  55.00
                      to 80.00
                  1,000
                      bbl
                  January
                      1, 2006 - January 1, 2007Collars
                  Oil
                  55.00
                      to 80.00
                  1,000
                      bbl
                  April
                      1, 2006 - January 1, 2007
  At
            December 31, 2005, we had the following fixed price physical delivery
            contracts
            outstanding:
  **Contract
                      Period End**
                  **Quantity**
                  **Pricing**Natural
                      Gas Contracts
                  March
                      31, 2006
                  8,000
                      GJ/day
                  $8.01
                      to $8.85
  ***Interest
            Rate Risk***
 Interest
            rate risk exists principally with respect to indebtedness that bears
            interest at
            floating rates. At December 31, 2005, the Trust had $95.5 million of
            indebtedness bearing interest at floating rates. Based on results of
            2005, if
            interest rate were to change by one full percentage point in 2006, the
            net
            impact on earnings would be approximately $0.6 million and the net impact
            on our
            cash provided by operating activities would be approximately $1.0
            million.
  ***Summary
            of Risk Sensitivities***
 Summarized
            below are the Trust's sensitivities to various risks, based on its 2005
            operations:
  **Sensitivity**
                  
                  **Estimated
                      2006 Impact On: ('000s)****Net
                      Earnings**
                  
                  **Cash
                      Flow**Crude
                      oil - US$1.00/bbl change in WTI
                  
                  
                  1,822
                  
                  
                  2,921Natural
                      gas - US$0.50/mcf change
                  
                  
                  1,447
                  
                  
                  2,320Foreign
                      exchange - $0.01 change in U.S. to Cdn dollar
                  
                  
                  1,888
                  
                  
                  1,178Interest
                      rate - 1% change
                  
                  
                  595
                  
                  
                  955
  ***Revenue*** ***Sources***
 For
            the
            year ended December 31, 2005, approximately 30% of the revenue from our
            properties was derived from natural gas and approximately 70% was derived
            from
            crude oil and natural gas liquids.
  -12-
  **Statement
            of Reserves Data and Other Oil and Gas Information** ****
  **Disclosure
            of Reserves Data**
 The
            reserves data set forth below (the "Reserves Data") is based upon an
            evaluations
            conducted by McDaniel with an effective date of December 31, 2005 contained
            in
            the McDaniel Report and by Sproule with an effective date December 31,
            2005
            contained in the Sproule Report. The Reserves Data summarizes the oil,
            NGL and
            natural gas reserves of Enterra and the net present values of future
            net revenue
            for these reserves using constant prices and costs and forecast prices
            and
            costs. The McDaniel Report and Sproule Report have been prepared in accordance
            with the standards contained in the COGE Handbook and the reserve definitions
            contained in NI 51-101. Additional information not required by NI 51-101
            has
            been presented to provide continuity and additional information which
            we believe
            is important to the readers of this information. Enterra engaged McDaniel
            and
            Sproule to provide an evaluation of its proved and proved plus probable
            reserves.
  At
            December 31, 2005 Enterra's reserves were in Canada and, specifically,
            in the
            provinces of Alberta, Saskatchewan and Manitoba, and in the United States,
            specifically in the state of Wyoming. McDaniel reviewed the reserves
            in Canada
            and Sproule reviewed the reserves in Wyoming.
  All
            evaluations and reviews of future net cash flow are stated prior to any
            provision for interest costs or general and administrative costs and
            after the
            deduction of estimate future capital expenditures for wells to which
            reserves
            have been assigned. It should not be assumed that the estimated future
            net cash
            flow shown below is representative of the fair market value of the properties
            of
            the Trust. There is no assurance that such price and cost assumptions
            will be
            attained and variances could be material. The recovery and reserve estimates
            of
            crude oil, NGLs and natural gas reserves provided herein are estimates
            only and
            there is no guarantee that the estimated reserves will be recovered.
            Actual
            crude oil, NGLs and natural gas reserves may be greater than or less
            than the
            estimates provided herein.
  **Oil
            and Natural Gas Reserves and Net Present Value of Future Net
            Revenue**
 
 The
            tables below are a summary of the oil, NGL and natural gas reserves of
            the Trust
            and the net present value of future net revenue attributable to such
            reserves as
            evaluated by McDaniel and Sproule based on constant and forecast price
            and cost
            assumptions. The tables summarize the data contained in the McDaniel
            Report and
            Sproule Report. Gross reserves include royalty interests. The data may
            contain
            slightly different numbers than such report due to rounding. Additionally,
            the
            numbers in the tables may not add exactly due to rounding. ****
  The
            McDaniel Report and Sproule Report are based on certain factual data
            supplied by
            the Trust and McDaniel's and Sproule's opinions of reasonable practice
            in the
            industry. The extent and character of ownership and all factual data
            pertaining
            to the Trust's petroleum properties and contracts (except for certain
            information residing in the public domain) were supplied by the Trust
            to
            McDaniel and Sproule and accepted without any further investigation.
  -13-
  **Reserves
            Data - Constant Prices and Costs**
 Summary
                      of Oil and Gas Reserves andNet
                      Present Values of Future Net RevenueAs
                      of December 31, 2005Constant
                      Prices and Costs
  Remaining
                      ReservesLight
                      andMedium
                      Crude
                  
                  Heavy
                  
                  Natural
                      GasOil
                  
                  Oil
                  
                  Liquids
                  
                  Natural
                      Gas
                  
                  TotalGross
                  
                  Net
                  
                  Gross
                  
                  Net
                  
                  Gross
                  
                  Net
                  
                  Gross
                  
                  Net
                  
                  Gross
                  
                  NetReserves
                      Category
                  
                  [mbbl]
                  
                  [mbbl]
                  
                  [mbbl]
                  
                  [mbbl]
                  
                  [mbbl]
                  
                  [mbbl]
                  
                  [mmcf]
                  
                  [mmcf]
                  
                  [mboe]
                  
                  [mboe]CANADA
                      ( McDaniels Report)ProvedDeveloped
                      Producing
                  
                  
                  3,621
                  
                  
                  3,162
                  
                  
                  1,287
                  
                  
                  1,145
                  
                  
                  1,120
                  
                  
                  783
                  
                  
                  33,952
                  
                  
                  25,342
                  
                  
                  11,687
                  
                  
                  9,313Developed
                      Non-Producing
                  
                  
                  4
                  
                  
                  4
                  
                  
                  -
                  
                  
                  -
                  
                  
                  143
                  
                  
                  103
                  
                  
                  5,887
                  
                  
                  4,323
                  
                  
                  1,128
                  
                  
                  828Undeveloped
                  
                  
                  53
                  
                  
                  47
                  
                  
                  -
                  
                  
                  -
                  
                  
                  142
                  
                  
                  99
                  
                  
                  4,634
                  
                  
                  3,430
                  
                  
                  968
                  
                  
                  717Total
                      Proved
                  
                  
                  3,679
                  
                  
                  3,213
                  
                  
                  1,287
                  
                  
                  1,145
                  
                  
                  1,405
                  
                  
                  985
                  
                  
                  44,473
                  
                  
                  33,095
                  
                  
                  13,783
                  
                  
                  10,858Probable
                  
                  
                  1,150
                  
                  
                  991
                  
                  
                  422
                  
                  
                  365
                  
                  
                  523
                  
                  
                  367
                  
                  
                  15,595
                  
                  
                  11,717
                  
                  
                  4,694
                  
                  
                  3,675Total
                      Proved Plus Probable
                  
                  
                  4,829
                  
                  
                  4,204
                  
                  
                  1,709
                  
                  
                  1,510
                  
                  
                  1,928
                  
                  
                  1,352
                  
                  
                  60,068
                  
                  
                  44,812
                  
                  
                  18,477
                  
                  
                  14,533UNITED
                      STATES (Sproule Report)ProvedDeveloped
                      Producing
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2,926
                  
                  
                  1,601
                  
                  
                  488
                  
                  
                  267Developed
                      Non-Producing
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Undeveloped
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Total
                      Proved
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2,926
                  
                  
                  1,601
                  
                  
                  488
                  
                  
                  267Probable
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  254
                  
                  
                  101
                  
                  
                  42
                  
                  
                  17Total
                      Proved Plus Probable
                  
                  
                  -
                  
                  
                  -
                  
                  
                  --
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  3,180
                  
                  
                  1,701
                  
                  
                  530
                  
                  
                  284AGGREGATEProvedDeveloped
                      Producing
                  
                  
                  3,621
                  
                  
                  3,162
                  
                  
                  1,287
                  
                  
                  1,145
                  
                  
                  1,120
                  
                  
                  783
                  
                  
                  36,878
                  
                  
                  26,943
                  
                  
                  12,175
                  
                  
                  9,580Developed
                      Non-Producing
                  
                  
                  4
                  
                  
                  4
                  
                  
                  -
                  
                  
                  -
                  
                  
                  143
                  
                  
                  103
                  
                  
                  5,887
                  
                  
                  4,323
                  
                  
                  1,128
                  
                  
                  828Undeveloped
                  
                  
                  53
                  
                  
                  47
                  
                  
                  -
                  
                  
                  -
                  
                  
                  142
                  
                  
                  99
                  
                  
                  4,634
                  
                  
                  3,430
                  
                  
                  968
                  
                  
                  717Total
                      Proved
                  
                  
                  3,678
                  
                  
                  3,213
                  
                  
                  1,287
                  
                  
                  1,145
                  
                  
                  1,405
                  
                  
                  985
                  
                  
                  47,399
                  
                  
                  34,696
                  
                  
                  14,271
                  
                  
                  11,125Probable
                  
                  
                  1,150
                  
                  
                  991
                  
                  
                  422
                  
                  
                  365
                  
                  
                  522
                  
                  
                  367
                  
                  
                  15,849
                  
                  
                  11,818
                  
                  
                  4,736
                  
                  
                  3,692Total
                      Proved Plus Probable
                  
                  
                  4,829
                  
                  
                  4,204
                  
                  
                  1,709
                  
                  
                  1,510
                  
                  
                  1,928
                  
                  
                  1,352
                  
                  
                  63,248
                  
                  
                  46,514
                  
                  
                  19,007
                  
                  
                  14,817
  -14-
  **Reserves
            Data - Constant Prices and Costs**
 Summary
                      of Oil and Gas Reserves andNet
                      Present Values of Future Net RevenueAs
                      of December 31, 2005Constant
                      Prices and Costs
  Net
                      Present Values of Future Net RevenueConstant
                      Prices and CostsBefore
                      Income Taxes Discounted at (%/year)
                  
                  After
                      Income Taxes Discounted at (%/year)0
                  
                  5
                  
                  10
                  
                  15
                  
                  20
                  
                  0
                  
                  5
                  
                  10
                  
                  15
                  
                  20Reserves
                      Category
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]CANADA
                      (McDaniel's Report)ProvedDeveloped
                      Producing
                  
                  
                  378.9
                  
                  
                  320.0
                  
                  
                  279.1
                  
                  
                  249.1
                  
                  
                  226.0
                  
                  
                  327.9
                  
                  
                  278.5
                  
                  
                  244.3
                  
                  
                  219.1
                  
                  
                  199.8Developed
                      Non-Producing
                  
                  
                  40.3
                  
                  
                  36.0
                  
                  
                  32.7
                  
                  
                  30.0
                  
                  
                  27.8
                  
                  
                  26.5
                  
                  
                  23.7
                  
                  
                  21.4
                  
                  
                  19.6
                  
                  
                  18.2Undeveloped
                  
                  
                  39.2
                  
                  
                  32.5
                  
                  
                  27.8
                  
                  
                  24.4
                  
                  
                  21.8
                  
                  
                  25.7
                  
                  
                  21.3
                  
                  
                  18.2
                  
                  
                  16.0
                  
                  
                  14.3Total
                      Proved
                  
                  
                  458.4
                  
                  
                  388.5
                  
                  
                  339.6
                  
                  
                  303.5
                  
                  
                  275.6
                  
                  
                  380.1
                  
                  
                  323.5
                  
                  
                  283.9
                  
                  
                  254.7
                  
                  
                  232.3Probable
                  
                  
                  173.7
                  
                  
                  122.9
                  
                  
                  94.0
                  
                  
                  75.7
                  
                  
                  63.3
                  
                  
                  115.7
                  
                  
                  81.5
                  
                  
                  62.2
                  
                  
                  50.1
                  
                  
                  41.8Total
                      Proved Plus Probable
                  
                  
                  632.1
                  
                  
                  511.4
                  
                  
                  433.6
                  
                  
                  379.2
                  
                  
                  338.9
                  
                  
                  495.8
                  
                  
                  405.0
                  
                  
                  346.1
                  
                  
                  304.8
                  
                  
                  274.1UNITED
                      STATES (Sproule Report)ProvedDeveloped
                      Producing
                  
                  
                  4.9
                  
                  
                  4.6
                  
                  
                  4.3
                  
                  
                  4.1
                  
                  
                  3.9
                  
                  
                  3.2
                  
                  
                  3.0
                  
                  
                  2.8
                  
                  
                  2.7
                  
                  
                  2.5Developed
                      Non-Producing
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Undeveloped
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Total
                      Proved
                  
                  
                  4.9
                  
                  
                  4.6
                  
                  
                  4.3
                  
                  
                  4.1
                  
                  
                  3.9
                  
                  
                  3.2
                  
                  
                  3.0
                  
                  
                  2.8
                  
                  
                  2.7
                  
                  
                  2.5Probable
                  
                  
                  0.2
                  
                  
                  0.1
                  
                  
                  0.1
                  
                  
                  0.1
                  
                  
                  0.0
                  
                  
                  0.1
                  
                  
                  0.1
                  
                  
                  0.1
                  
                  
                  0.0
                  
                  
                  0.0Total
                      Proved Plus Probable
                  
                  
                  5.1
                  
                  
                  4.7
                  
                  
                  4.4
                  
                  
                  4.2
                  
                  
                  4.0
                  
                  
                  3.3
                  
                  
                  3.1
                  
                  
                  2.9
                  
                  
                  2.7
                  
                  
                  2.6Note:
                      An exchange rate of $0.85US/CDN was used to convert Sproule
                      US values to
                      Canadian dollarsAGGREGATEProvedDeveloped
                      Producing
                  
                  
                  383.8
                  
                  
                  324.6
                  
                  
                  283.4
                  
                  
                  253.2
                  
                  
                  229.9
                  
                  
                  331.1
                  
                  
                  281.5
                  
                  
                  247.1
                  
                  
                  221.8
                  
                  
                  202.3Developed
                      Non-Producing
                  
                  
                  40.3
                  
                  
                  36.0
                  
                  
                  32.7
                  
                  
                  30.0
                  
                  
                  27.8
                  
                  
                  26.5
                  
                  
                  23.7
                  
                  
                  21.4
                  
                  
                  19.6
                  
                  
                  18.2Undeveloped
                  
                  
                  39.2
                  
                  
                  32.5
                  
                  
                  27.8
                  
                  
                  24.4
                  
                  
                  21.8
                  
                  
                  25.7
                  
                  
                  21.3
                  
                  
                  18.2
                  
                  
                  16.0
                  
                  
                  14.3Total
                      Proved
                  
                  
                  463.3
                  
                  
                  393.1
                  
                  
                  343.9
                  
                  
                  307.6
                  
                  
                  279.5
                  
                  
                  383.3
                  
                  
                  326.5
                  
                  
                  286.7
                  
                  
                  257.4
                  
                  
                  234.8Probable
                  
                  
                  173.9
                  
                  
                  123.0
                  
                  
                  94.1
                  
                  
                  75.8
                  
                  
                  63.3
                  
                  
                  115.8
                  
                  
                  81.6
                  
                  
                  62.3
                  
                  
                  50.1
                  
                  
                  41.8Total
                      Proved Plus Probable
                  
                  
                  637.2
                  
                  
                  516.1
                  
                  
                  438.0
                  
                  
                  383.4
                  
                  
                  342.9
                  
                  
                  499.1
                  
                  
                  408.1
                  
                  
                  349.0
                  
                  
                  307.5
                  
                  
                  276.7
  -15-
 
 Total
                      Future Net Revenue(Undiscounted)As
                      of December 31, 2005Constant
                      Prices and Costs
  Future
                      Net
                  
                  
                  
                  Future
                      NetRevenue
                  
                  
                  
                  RevenueRoyalties
                  
                  
                  
                  Capital
                  
                  
                  
                  Before
                  
                  
                  
                  AfterNet
                      of
                  
                  Operating
                  
                  Development
                  
                  Abandonment
                  
                  Income
                  
                  Income
                  
                  IncomeRevenue
                  
                  ARTC
                  
                  Costs
                  
                  Costs
                  
                  Costs
                  
                  Taxes
                  
                  Taxes
                  
                  TaxesReserves
                      Category
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]CANADA
                      (McDaniel's Report)Total
                      Proved
                  
                  
                  790.8
                  
                  
                  159.6
                  
                  
                  147.2
                  
                  
                  7.2
                  
                  
                  18.4
                  
                  
                  458.5
                  
                  
                  78.4
                  
                  
                  380.1Total
                      Proved Plus Probable
                  
                  
                  1,062.9
                  
                  
                  215.3
                  
                  
                  189.1
                  
                  
                  7.9
                  
                  
                  18.4
                  
                  
                  632.1
                  
                  
                  136.3
                  
                  
                  495.8UNITED
                      STATES (Sproule Report)Total
                      Proved
                  
                  
                  10.6
                  
                  
                  1.3
                  
                  
                  3.5
                  
                  
                  -
                  
                  
                  0.9
                  
                  
                  4.9
                  
                  
                  1.7
                  
                  
                  3.2Total
                      Proved Plus Probable
                  
                  
                  11.2
                  
                  
                  1.4
                  
                  
                  3.8
                  
                  
                  -
                  
                  
                  0.9
                  
                  
                  5.1
                  
                  
                  1.8
                  
                  
                  3.3AGGREGATETotal
                      Proved
                  
                  
                  801.4
                  
                  
                  160.9
                  
                  
                  150.7
                  
                  
                  7.2
                  
                  
                  19.3
                  
                  
                  463.4
                  
                  
                  80.1
                  
                  
                  383.3Total
                      Proved Plus Probable
                  
                  
                  1,074.1
                  
                  
                  216.7
                  
                  
                  192.9
                  
                  
                  7.9
                  
                  
                  19.3
                  
                  
                  637.2
                  
                  
                  138.1
                  
                  
                  499.1
   Future
                      Net Revenue by Production GroupAs
                      of December 31, 2005Constant
                      Prices and Costs
  Reserves
                        Category
                  
                  Future
                      Net Revenue Before Income Taxes and Discounted at 10%
                      [$mm]ProvedLight
                      and Medium Crude Oil(1)
                  
                  100.6Heavy
                      Oil
                  
                  14.1Natural
                      Gas(2)
                  
                  
                  221.4Total(3)
                  
                  
                  336.1Proved
                      Plus ProbableLight
                      and Medium Crude Oil(1)
                  
                  
                  129.6Heavy
                      Oil
                  
                  
                  18.8Natural
                      Gas(2)
                  
                  
                  281.1Total(3)
                  
                  
                  429.5
  *Notes:*
                  *(1)
                      Including by-products, but excluding solution gas from oil
                      wells**(2)
                      Including solution gas and other by-products**(3)
                      Excludes ARTC*
  -16-
  **Reserves
            Data - Forecast Prices and Costs**
 Summary
                      of Oil and Gas Reserves andNet
                      Present Values of Future Net RevenueAs
                      of December 31, 2005Forecast
                      Prices and Costs
  Remaining
                      ReservesLight
                      andMedium
                      Crude
                  
                  Heavy
                  
                  Natural
                      GasOil
                  
                  Oil
                  
                  Liquids
                  
                  Natural
                      Gas
                  
                  TotalGross
                  
                  Net
                  
                  Gross
                  
                  Net
                  
                  Gross
                  
                  Net
                  
                  Gross
                  
                  Net
                  
                  Gross
                  
                  NetReserves
                      Category
                  
                  [mbbl]
                  
                  [mbbl]
                  
                  [mbbl]
                  
                  [mbbl]
                  
                  [mbbl]
                  
                  [mbbl]
                  
                  [mmcf]
                  
                  [mmcf]
                  
                  [mboe]
                  
                  [mboe]CANADA
                      (McDanielReport)ProvedDeveloped
                      Producing
                  
                  
                  3,624
                  
                  
                  3,165
                  
                  
                  1,292
                  
                  
                  1,146
                  
                  
                  1,121
                  
                  
                  784
                  
                  
                  33,986
                  
                  
                  25,371
                  
                  
                  11,701
                  
                  
                  9,322Developed
                      Non-Producing
                  
                  
                  4
                  
                  
                  4
                  
                  
                  -
                  
                  
                  -
                  
                  
                  143
                  
                  
                  103
                  
                  
                  5,877
                  
                  
                  4,320
                  
                  
                  1,127
                  
                  
                  827Undeveloped
                  
                  
                  53
                  
                  
                  47
                  
                  
                  -
                  
                  
                  -
                  
                  
                  142
                  
                  
                  99
                  
                  
                  4,634
                  
                  
                  3,435
                  
                  
                  968
                  
                  
                  719Total
                      Proved
                  
                  
                  3,681
                  
                  
                  3,216
                  
                  
                  1,292
                  
                  
                  1,146
                  
                  
                  1,406
                  
                  
                  986
                  
                  
                  44,497
                  
                  
                  33,126
                  
                  
                  13,796
                  
                  
                  10,868Probable
                  
                  
                  1,148
                  
                  
                  985
                  
                  
                  421
                  
                  
                  364
                  
                  
                  524
                  
                  
                  367
                  
                  
                  15,610
                  
                  
                  11,716
                  
                  
                  4,695
                  
                  
                  3,669Total
                      Proved Plus Probable
                  
                  
                  4,829
                  
                  
                  4,201
                  
                  
                  1,713
                  
                  
                  1,510
                  
                  
                  1,930
                  
                  
                  1,353
                  
                  
                  60,107
                  
                  
                  44,842
                  
                  
                  18,491
                  
                  
                  14,537UNITED
                      STATES (Sproule Report)ProvedDeveloped
                      Producing
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2,926
                  
                  
                  1,601
                  
                  
                  488
                  
                  
                  267Developed
                      Non-Producing
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Undeveloped
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Total
                      Proved
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2,926
                  
                  
                  1,601
                  
                  
                  488
                  
                  
                  267Probable
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  254
                  
                  
                  101
                  
                  
                  42
                  
                  
                  17Total
                      Proved Plus Probable
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  3,180
                  
                  
                  1,701
                  
                  
                  530
                  
                  
                  284AGGREGATEProvedDeveloped
                      Producing
                  
                  
                  3,624
                  
                  
                  3,165
                  
                  
                  1,292
                  
                  
                  1,146
                  
                  
                  1,121
                  
                  
                  784
                  
                  
                  36,912
                  
                  
                  26,972
                  
                  
                  12,189
                  
                  
                  9,589Developed
                      Non-Producing
                  
                  
                  4
                  
                  
                  4
                  
                  
                  -
                  
                  
                  -
                  
                  
                  143
                  
                  
                  103
                  
                  
                  5,877
                  
                  
                  4,320
                  
                  
                  1,127
                  
                  
                  827Undeveloped
                  
                  
                  53
                  
                  
                  47
                  
                  
                  -
                  
                  
                  -
                  
                  
                  142
                  
                  
                  99
                  
                  
                  4,634
                  
                  
                  3,435
                  
                  
                  968
                  
                  
                  719Total
                      Proved
                  
                  
                  3,681
                  
                  
                  3,216
                  
                  
                  1,292
                  
                  
                  1,146
                  
                  
                  1,406
                  
                  
                  986
                  
                  
                  47,423
                  
                  
                  34,727
                  
                  
                  14,284
                  
                  
                  11,135Probable
                  
                  
                  1,148
                  
                  
                  985
                  
                  
                  421
                  
                  
                  364
                  
                  
                  524
                  
                  
                  367
                  
                  
                  15,864
                  
                  
                  11,817
                  
                  
                  4,737
                  
                  
                  3,686Total
                      Proved Plus Probable
                  
                  
                  4,829
                  
                  
                  4,201
                  
                  
                  1,713
                  
                  
                  1,510
                  
                  
                  1,930
                  
                  
                  1,353
                  
                  
                  63,287
                  
                  
                  46,544
                  
                  
                  19,021
                  
                  
                  14,821
  -17-
  **Reserves
            Data - Forecast Prices and Costs**
  Summary
                      of Oil and Gas Reserves andNet
                      Present Values of Future Net RevenueAs
                      of December 31, 2005Forecast
                      Prices and Costs
  Before
                      Income Taxes Discounted at (%/year)
                  
                  After
                      Income Taxes Discounted at (%/year)0
                  
                  5
                  
                  10
                  
                  15
                  
                  20
                  
                  0
                  
                  5
                  
                  10
                  
                  15
                  
                  20Reserves
                      Category
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]
                  
                  [$mm]CANADA
                      (McDaniel Report)ProvedDeveloped
                      Producing
                  
                  
                  322
                  
                  
                  279
                  
                  
                  249
                  
                  
                  227
                  
                  
                  209
                  
                  
                  290
                  
                  
                  252
                  
                  
                  225
                  
                  
                  204
                  
                  
                  189Developed
                      Non-Producing
                  
                  
                  33
                  
                  
                  30
                  
                  
                  28
                  
                  
                  26
                  
                  
                  24
                  
                  
                  21
                  
                  
                  20
                  
                  
                  18
                  
                  
                  17
                  
                  
                  16Undeveloped
                  
                  
                  32
                  
                  
                  27
                  
                  
                  24
                  
                  
                  21
                  
                  
                  19
                  
                  
                  21
                  
                  
                  18
                  
                  
                  16
                  
                  
                  14
                  
                  
                  13Total
                      Proved
                  
                  
                  387
                  
                  
                  336
                  
                  
                  301
                  
                  
                  274
                  
                  
                  252
                  
                  
                  332
                  
                  
                  289
                  
                  
                  258
                  
                  
                  235
                  
                  
                  217Probable
                  
                  
                  139
                  
                  
                  99
                  
                  
                  77
                  
                  
                  63
                  
                  
                  53
                  
                  
                  93
                  
                  
                  66
                  
                  
                  51
                  
                  
                  41
                  
                  
                  35Total
                      Proved Plus Probable
                  
                  
                  526
                  
                  
                  435
                  
                  
                  378
                  
                  
                  337
                  
                  
                  305
                  
                  
                  425
                  
                  
                  355
                  
                  
                  309
                  
                  
                  277
                  
                  
                  252UNITED
                      STATES (Sproule Report)ProvedDeveloped
                      Producing
                  
                  
                  5.9
                  
                  
                  5.5
                  
                  
                  5.2
                  
                  
                  4.9
                  
                  
                  4.6
                  
                  
                  3.9
                  
                  
                  3.5
                  
                  
                  3.3
                  
                  
                  3.1
                  
                  
                  3.0Developed
                      Non-Producing
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Undeveloped
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Total
                      Proved
                  
                  
                  5.9
                  
                  
                  5.5
                  
                  
                  5.2
                  
                  
                  4.9
                  
                  
                  4.6
                  
                  
                  3.9
                  
                  
                  3.5
                  
                  
                  3.3
                  
                  
                  3.1
                  
                  
                  3.0Probable
                  
                  
                  0.3
                  
                  
                  0.2
                  
                  
                  0.2
                  
                  
                  0.1
                  
                  
                  0.1
                  
                  
                  0.2
                  
                  
                  0.2
                  
                  
                  0.1
                  
                  
                  0.1
                  
                  
                  0.1Total
                      Proved Plus Probable
                  
                  
                  6.2
                  
                  
                  5.7
                  
                  
                  5.4
                  
                  
                  5.0
                  
                  
                  4.7
                  
                  
                  4.1
                  
                  
                  3.7
                  
                  
                  3.4
                  
                  
                  3.2
                  
                  
                  3.1*Note:
                      An exchange rate of $0.85US/CDN was used to convert Sproule
                      US values to
                      Canadian dollars.*AGGREGATEProvedDeveloped
                      Producing
                  
                  
                  327.9
                  
                  
                  284.5
                  
                  
                  254.2
                  
                  
                  231.9
                  
                  
                  213.6
                  
                  
                  274.9
                  
                  
                  236.5
                  
                  
                  209.3
                  
                  
                  190.1
                  
                  
                  174.0Developed
                      Non-Producing
                  
                  
                  33
                  
                  
                  30
                  
                  
                  28
                  
                  
                  26
                  
                  
                  24
                  
                  
                  21
                  
                  
                  20
                  
                  
                  18
                  
                  
                  17
                  
                  
                  16Undeveloped
                  
                  
                  32
                  
                  
                  27
                  
                  
                  24
                  
                  
                  21
                  
                  
                  19
                  
                  
                  21
                  
                  
                  18
                  
                  
                  16
                  
                  
                  14
                  
                  
                  13Total
                      Proved
                  
                  
                  392.9
                  
                  
                  341.5
                  
                  
                  306.2
                  
                  
                  278.9
                  
                  
                  256.6
                  
                  
                  316.9
                  
                  
                  274.5
                  
                  
                  243.3
                  
                  
                  221.1
                  
                  
                  203.0Probable
                  
                  
                  139.3
                  
                  
                  99.2
                  
                  
                  77.2
                  
                  
                  63.1
                  
                  
                  53.1
                  
                  
                  93.2
                  
                  
                  66.2
                  
                  
                  51.1
                  
                  
                  41.1
                  
                  
                  35.1Total
                      Proved Plus Probable
                  
                  
                  532.2
                  
                  
                  440.7
                  
                  
                  383.4
                  
                  
                  342.0
                  
                  
                  309.7
                  
                  
                  429.1
                  
                  
                  358.7
                  
                  
                  312.4
                  
                  
                  280.2
                  
                  
                  255.1
  -18-
 
 Total
                      Future Net Revenue(Undiscounted)As
                      of December 31, 2005Forecast
                      Prices and Costs
  Future
                      Net
                  
                  Future
                      NetRevenue
                  
                  RevenueRoyalties
                  
                  Capital
                  
                  Before
                  
                  AfterNet
                      of
                  Operating
                  Development
                  Abandonment
                  Income
                  Income
                  IncomeRevenue
                  ARTC
                  Costs
                  Costs
                  Costs
                  Taxes
                  Taxes
                  TaxesReserves
                      Category
                  [$mm]
                  [$mm]
                  [$mm]
                  [$mm]
                  [$mm]
                  [$mm]
                  [$mm]
                  [$mm]CANADA
                      (McDaniel's Report)Total
                      Proved
                  725.2
                  142.3
                  166.1
                  7.4
                  23.0
                  386.4
                  54.0
                  332.4Total
                      Proved Plus Probable
                  967.8
                  189.4
                  220.4
                  8.3
                  24.0
                  525.7
                  100.2
                  425.5UNITED
                      STATES (Sproule Report)Total
                      Proved
                  12.2
                  1.5
                  3.9
                  -
                  1.0
                  5.8
                  2.1
                  3.7Total
                      Proved Plus Probable
                  13.0
                  1.6
                  4.2
                  -
                  1.0
                  6.2
                  2.2
                  4.0AGGREGATETotal
                      Proved
                  737.4
                  143.8
                  170.0
                  7.4
                  24.0
                  392.2
                  56.1
                  336.1Total
                      Proved Plus Probable
                  980.8
                  191.0
                  224.6
                  8.3
                  25.0
                  531.9
                  102.4
                  429.9
  Future
                      Net Revenue by Production GroupAs
                      of December 31, 2005Forecast
                      Prices and Costs
   Reserves
                        Category
                  
                  Future
                      Net Revenue Before Income Taxes and Discounted at 10%
                      [$mm]ProvedLight
                      and Medium Crude Oil(1)
                  
                  
                  96.1Heavy
                      Oil
                  
                  
                  16.5Natural
                      Gas(2)
                  
                  
                  185.2Total(3)
                  
                  
                  297.8Proved
                      Plus ProbableLight
                      and Medium Crude Oil(1)
                  
                  
                  121.1Heavy
                      Oil
                  
                  
                  21.5Natural
                      Gas(2)
                  
                  
                  231.4Total(3)
                  
                  
                  374.0
  *Notes:*
                  *(1)
                      Including by-products, but excluding solution gas from oil
                      wells**(2)
                      Including solution gas and other by-products**(3)
                      Excludes ARTC.*
 
 -19-
 
 **Pricing
                      Assumptions****(1)****Constant
                      Prices and Costs**
  Edmonton
                  
                  Bow
                      River
                  
                  Cromer
                  
                  US
                  
                  US
                  
                  Alberta
                  
                  Natural
                      Gas
                  
                  US/CANWTI
                      at
                  
                  Par
                      Price
                  
                  Medium
                  
                  Medium
                  
                  Henry
                      Hub
                  
                  Actual
                  
                  Average
                  
                  Liquids
                      FOB
                  
                  ExchangeYear
                  
                  Cushing
                  
                  40°API
                  
                  25°API
                  
                  
                  
                  Gas
                      Price
                  
                  Gas
                      Price
                  
                  Plant
                      gate Price
                  
                  Edmonton
                  
                  Rate[$US/bbl]
                  
                  [$Cdn/bbl]
                  
                  [$Cdn/bbl]
                  
                  [$Cdn/bbl]
                  
                  $US/Mmbtu
                  
                  $US/Mmbtu
                  
                  [$Cdn/Mmbtu]
                  
                  [$Cdn/bbl]
                  
                  $US/$Cdn2005(Year
                      end)
                  
                  
                  61.04
                  
                  
                  68.46
                  
                  
                  36.71
                  
                  
                  51.65
                  
                  
                  
                  
                  
                  7.72
                  
                  
                  9.80
                  
                  
                  56.30
                  
                  
                  0.830*(1)**Pricing assumptions are the same for both the Sproule Report
                      and the
                      McDaniel Report.*
 
 **Pricing
                      Assumptions****(1)****Forecast
                      Prices and Costs**
  Edmonton
                  Bow
                      River
                  Alberta
                  US
                  Alberta
                  Natural
                      Gas
                  
                  US/CANWTI
                      at
                  Par
                      Price
                  Medium
                  Heavy
                  Henry
                      Hub
                  Average
                  Liquids
                      FOB
                  
                  ExchangeYear
                  Cushing
                  40°API
                  25°API
                  12°API
                  Gas
                      Price
                  Plant
                      gate Price
                  Edmonton
                  Inflation
                  Rate[$US/bbl]
                  [$Cdn/bbl]
                  [$Cdn/bbl]
                  [$Cdn/bbl]
                  $US/Mmbtu
                  [$Cdn/Mmbtu]
                  [$Cdn/bbl]
                  %
                  $US/$Cdn2005
                      (est.)
                  56.45
                  69.05
                  45.00
                  34.55
                  8.50
                  8.60
                  50.10
                  2.0
                  0.825Forecast2006
                  57.50
                  66.60
                  45.70
                  35.50
                  9.90
                  10.40
                  51.40
                  2.5
                  0.8502007
                  55.40
                  64.20
                  45.30
                  36.10
                  9.05
                  9.35
                  48.90
                  2.5
                  0.8502008
                  52.50
                  60.70
                  44.00
                  36.00
                  8.15
                  8.30
                  45.80
                  2.5
                  0.8502009
                  49.50
                  57.20
                  42.60
                  35.30
                  7.25
                  7.20
                  42.60
                  2.5
                  0.8502010
                  46.90
                  54.10
                  40.30
                  33.40
                  6.85
                  6.70
                  40.20
                  2.5
                  0.8502011
                  48.10
                  55.50
                  41.30
                  34.20
                  7.05
                  6.85
                  41.30
                  2.5
                  0.8502012
                  49.30
                  56.80
                  42.30
                  35.10
                  7.25
                  7.05
                  42.20
                  2.5
                  0.8502013
                  50.50
                  58.20
                  43.40
                  35.90
                  7.40
                  7.20
                  43.20
                  2.5
                  0.8502014
                  51.80
                  59.70
                  44.50
                  36.90
                  7.60
                  7.40
                  44.30
                  2.5
                  0.8502015
                  53.10
                  61.20
                  45.60
                  37.80
                  7.80
                  7.60
                  45.50
                  2.5
                  0.8502016
                  54.40
                  62.70
                  46.70
                  38.70
                  7.95
                  7.75
                  46.60
                  2.5
                  0.8502017
                  55.80
                  64.30
                  47.90
                  39.70
                  8.20
                  8.00
                  47.80
                  2.5
                  0.8502018
                  57.20
                  65.90
                  49.10
                  40.70
                  8.40
                  8.20
                  49.00
                  2.5
                  0.8502019
                  58.60
                  67.60
                  50.30
                  41.70
                  8.60
                  8.35
                  50.20
                  2.5
                  0.8502020
                  60.10
                  69.30
                  51.60
                  42.80
                  8.80
                  8.55
                  51.50
                  2.5
                  0.850Thereafter
                  +2.5%/yr
                  +2.5%/yr
                  +2.5
                      yr %/
                  +2.5
                      yr %/
                  +2.5%/yr
                  +2.5%/yr
                  +2.5%/yr
                  2.5
                  0.850
 *(1)* *Pricing assumptions are the same for both the Sproule Report and the
            McDaniel
            Report.*
  -20-
 **Reserves
                      Reconciliation**Reconciliation
                      of Company Net Reserves by Product TypeAs
                      of December 31, 2005Forecast
                      Prices and Costs
  Light
                      and Medium Crude Oil
                  
                  Natural
                      Gas LiquidsTotal
                      Proved
                  
                  Probable
                  
                  Total
                      Proved
                  
                  Total
                      Proved
                  
                  Probable
                  
                  Total
                      ProvedReserves
                  
                  Reserves
                  
                  Plus
                      Probable
                  
                  Reserves
                  
                  Reserves
                  
                  Plus
                      Probable[mbbl]
                  
                  [mbbl]
                  
                  [mbbl]
                  
                  [mbbl]
                  
                  [mbbl]
                  
                  [mbbl]CANADAOpening
                      balance - December 31, 2004
                  
                  
                  3,913.7
                  
                  
                  1,034.3
                  
                  
                  4,948.0
                  
                  
                  136.1
                  
                  
                  34.1
                  
                  
                  170.2Discoveries
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Technical
                      revisions
                  
                  
                  432.8
                  
                  
                  -61.5
                  
                  
                  371.3
                  
                  
                  15.0
                  
                  
                  15.6
                  
                  
                  30.6Acquisitions
                  
                  
                  44.6
                  
                  
                  12.6
                  
                  
                  57.2
                  
                  
                  922.2
                  
                  
                  317.2
                  
                  
                  1,239.4Dispositions
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Production
                  
                  
                  -1,175.4
                  
                  
                  -
                  
                  
                  -1,175.4
                  
                  
                  -87.6
                  
                  
                  -
                  
                  
                  -87.6Closing
                      balance - December 31, 2005
                  
                  
                  3,215.7
                  
                  
                  985.4
                  
                  
                  4,201.1
                  
                  
                  985.7
                  
                  
                  366.9
                  
                  
                  1,352.6UNITED
                      STATESOpening
                      balance - December 31, 2004
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  
                  
                  
                  -
                  
                  
                  -Discoveries
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Technical
                      revisions
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Acquisitions
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Dispositions
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Production
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Closing
                      balance - December 31, 2005
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -AGGREGATEOpening
                      balance - December 31, 2004
                  
                  
                  3,913.7
                  
                  
                  1,034.3
                  
                  
                  4,948.0
                  
                  
                  136.1
                  
                  
                  34.1
                  
                  
                  170.2Discoveries
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Technical
                      revisions
                  
                  
                  432.8
                  
                  
                  -65.8
                  
                  
                  371.3
                  
                  
                  14.0
                  
                  
                  15.6
                  
                  
                  29.6Acquisitions
                  
                  
                  44.6
                  
                  
                  12.6
                  
                  
                  57.2
                  
                  
                  922.2
                  
                  
                  317.2
                  
                  
                  1,239.4Dispositions
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  0.0
                  
                  
                  0.0
                  
                  
                  0.0Production
                  
                  
                  -1,175.4
                  
                  
                  -
                  
                  
                  -1175.4
                  
                  
                  -87.6
                  
                  
                  0.0
                  
                  
                  -87.6Closing
                      balance - December 31, 2005
                  
                  
                  3,215.7
                  
                  
                  985.4
                  
                  
                  4,201.1
                  
                  
                  984.7
                  
                  
                  366.9
                  
                  
                  1,351.6
  -21-
 
 **Reserves
                      Reconciliation**Reconciliation
                      of Company Net Reserves by Product TypeAs
                      of December 31, 2005Forecast
                      Prices and Costs
  Associated
                      and Non-Associated Gas
                  
                  Heavy
                      OilTotal
                      Proved
                  
                  Probable
                  
                  Total
                      Proved
                  
                  Total
                      Proved
                  
                  Probable
                  
                  Total
                      ProvedReserves
                  
                  Reserves
                  
                  Plus
                      Probable
                  
                  Reserves
                  
                  Reserves
                  
                  Plus
                      Probable[mmcf]
                  
                  [mmcf]
                  
                  [mmcf]
                  
                  [mbbl]
                  
                  [mbbl]
                  
                  [mbbl]CANADAOpening
                      balance - December 31, 2004
                  
                  
                  5,536.6
                  
                  
                  1,343.8
                  
                  
                  6,880.4
                  
                  
                  1,329.8
                  
                  
                  411.1
                  
                  
                  1,740.9Discoveries
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Technical
                      revisions
                  
                  
                  -2,806.3
                  
                  
                  -1,103.5
                  
                  
                  -3,909.8
                  
                  
                  102.1
                  
                  
                  -47.0
                  
                  
                  55.1Acquisitions
                  
                  
                  33,561.4
                  
                  
                  11,475.2
                  
                  
                  45,036.6
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Dispositions
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Production
                  
                  
                  -3,165.3
                  
                  
                  -
                  
                  
                  -3,165.3
                  
                  
                  -286.1
                  
                  
                  -
                  
                  
                  -286.1Closing
                      balance - December 31, 2005
                  
                  
                  33,126.4
                  
                  
                  11,715.5
                  
                  
                  44,841.9
                  
                  
                  1,145.8
                  
                  
                  364.1
                  
                  
                  1,509.9UNITED
                      STATESOpening
                      balance - December 31, 2004
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Discoveries
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Technical
                      revisions
                  
                  
                  -408.1
                  
                  
                  -9,375.1
                  
                  
                  -9,783.2
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Acquisitions
                  
                  
                  2,620.2
                  
                  
                  9,476.1
                  
                  
                  12,096.3
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Dispositions
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Production
                  
                  
                  -571.1
                  
                  
                  -
                  
                  
                  -571.1
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Closing
                      balance - December 31, 2005
                  
                  
                  1,641.0
                  
                  
                  101.0
                  
                  
                  1,742.0
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -AGGREGATEOpening
                      balance - December 31, 2004
                  
                  
                  5,536.6
                  
                  
                  1,343.8
                  
                  
                  6,880.4
                  
                  
                  1,329.8
                  
                  
                  411.1
                  
                  
                  1,740.9Discoveries
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Technical
                      revisions
                  
                  
                  -3,214.4
                  
                  
                  -10,478.6
                  
                  
                  -15,682.9
                  
                  
                  102.1
                  
                  
                  -47.0
                  
                  
                  55.1Acquisitions
                  
                  
                  36,181.6
                  
                  
                  20,951.3
                  
                  
                  57,132.9
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Dispositions
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Production
                  
                  
                  -3,736.4
                  
                  
                  0.0
                  
                  
                  -3,736.4
                  
                  
                  -286.1
                  
                  
                  0.0
                  
                  
                  -286.1Closing
                      balance - December 31, 2005
                  
                  
                  34,767.4
                  
                  
                  11,816.5
                  
                  
                  46,583.9
                  
                  
                  1,145.8
                  
                  
                  364.1
                  
                  
                  1,509.9
  -22-
  Reconciliation
                      of Changes inNet
                      Present Values of Future Net RevenueDiscounted
                      at 10% Per YearProved
                      ReservesConstant
                      Prices and Costs
 **($M)**Estimated
                        Future Net Revenue After Tax, December 31, 2004
                    
                    
                    81,120Oil
                        and Gas Sales During the Period Net of Royalties and Production
                        Costs
                    
                    
                    (89,044
                    )Changes
                        due to Prices
                    
                    
                    107,194Changes
                        in Future Development Costs
                    
                    
                    (21,869
                    )Development
                      costs incurred during the year
                    
                    
                    23,101Changes
                        Resulting from Extensions, Infill Drilling and Improved
                        Recovery
                    
                    
                    1,024Changes
                        Resulting from Discoveries
                    
                    
                    -Changes
                        Resulting from Acquisitions of Reserves
                    
                    
                    210,631Changes
                        Resulting from Dispositions of Reserves
                    
                    
                    -Accretion
                        of Discount
                    
                    
                    8,112Other
                        Significant Factors
                    
                    
                    -Net
                        Changes in Income Taxes
                    
                    
                    (39,068
                    )Changes
                        Resulting from Technical Reserves Revisions Plus Effects
                        of Timing
                    
                    
                    (5,576
                    )**Estimated
                        Future Net Revenue After Tax, December 31, 2005**
                    
                    
                    **286,777**
  **Undeveloped
            Reserves**
 The
            Trust
            has 33 proved undeveloped locations primarily at the Ferrier and Desan
            fields.
            It has waterflood development in the Cummings "Y" pool.
 
 **Significant
            Factors or Uncertainties Affecting Reserves Data**
 The
            process of estimating reserves is complex. It requires significant judgments
            and
            decisions based on available geological, geophysical, engineering, and
            economic
            data. These estimates may change substantially as additional data from
            ongoing
            development activities and production performance becomes available and
            as
            economic conditions impacting oil and gas prices and costs change. The
            reserve
            estimates contained herein are based on current production forecasts,
            prices and
            economic conditions. McDaniel and Sproule, independent engineering firms,
            evaluate the Trust's reserves.
 
 As
            circumstances change and additional data become available, reserve estimates
            also change. Estimates made are reviewed and revised, either upward or
            downward,
            as warranted by the new information. Revisions are often required due
            to changes
            in well performance, prices, economic conditions and governmental
            restrictions.
 
 Although
            every reasonable effort is made to ensure that reserve estimates are
            accurate,
            reserve estimation is an inferential science. As a result, the subjective
            decisions, new geological or production information and a changing environment
            may impact these estimates. Revisions to reserve estimates can arise
            from
            changes in year-end oil and gas prices, and reservoir performance. Such
            revisions can be either positive or negative.
  -23-
  **Future
            Development Costs**
 The
            table
            below sets out the development costs deducted in the estimation of future
            net
            revenue attributable to proved reserves (using both constant prices and
            costs
            and forecast prices and costs) and proved plus probable reserves (using
            forecast
            prices and costs only). Note all future development costs are associated
            with
            Canadian assets. There is no future development costs associated with
            the U.S.
            assets.
  Constant
                        Prices and Costs
                    
                    Forecast
                        Prices and CostsProved
                        Reserves
                    
                    Proved
                        Reserves
                    
                    Proved
                          Plus Probable Reserves(M$)
                    
                    (M$)
                    
                    (M$)**2006**
                    
                    
                    6,984
                    
                    
                    7,158
                    
                    
                    7,466**2007**
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -**2008**
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -**2009**
                    
                    
                    200
                    
                    
                    226
                    
                    
                    226**2010**
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -**Remaining
                        Years**
                    
                    
                    -
                    
                    
                    -
                    
                    
                    656**Total
                        Undiscounted**
                    
                    
                    7,184
                    
                    
                    7,384
                    
                    
                    8,349**Total
                        Discounted at 10% per year**
                    
                    
                    6,789
                    
                    
                    6,973
                    
                    
                    7,448
  **Common
            Infrastructure Costs**
 Under
            the
            revised farm-in arrangement with JED, JED will enter into a 3-year take
            or pay
            arrangement where the full cost of common infrastructure plus a 12% return
            on
            the investment will be recovered.
  Constant
                      Prices and Costs
                  
                  Forecast
                      Prices and CostsProved
                      Reserves
                  
                  Proved
                      Reserves
                  
                  Proved
                      Plus Probable Reserves(M$)
                  
                  (M$)
                  
                  (M$)**2006**
                  
                  
                  6,600
                  
                  
                  6,766
                  
                  
                  6,766**Remaining
                      Years**
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -**Total
                      Undiscounted**
                  
                  
                  6,600
                  
                  
                  6,766
                  
                  
                  6,766
  The
            Trust
            estimates that its internally generated cash flow will be sufficient
            to fund the
            future development costs disclosed above. The Trust typically has available
            three sources of funding to finance its capital expenditure program;
            internally
            generated cash flow from operations, debt financing when appropriate
            and new
            equity issues, if available on favourable terms.
  The
            Trust
            expects to fund its total 2006 capital program with internally generated
            cash
            flow and equity and debt issuances.
  **Oil
            and Gas Properties**
 The
            Trust's core areas include a variety of assets in the Western Canada
            Sedimentary
            Basin in the Provinces of Alberta and British Columbia including the
            following
            major producing fields and areas in Alberta: Clair, Sylvan Lake,
            Provost-Alliance-Wainwright, Princess, Ricinus, Ferrier and Lochend.
            In the
            Province of British Columbia the Trust has a significant producing area
            at
            Desan. In the United States Enterra's significant producing assets include
            coal
            bed methane fields near Gillette, Wyoming and producing regions in Grant,
            Lincoln and Logan Counties in Oklahoma. The Trust also has in Alberta,
            British
            Columbia, Saskatchewan, Wyoming, Montana and Oklahoma, an inventory of
            minor
            producing assets, minor royalty interests, and various prospects of an
            exploitation and exploration nature on undeveloped lands, the development
            of
            which could significantly increase the size of our existing production
            and
            reserve base.
  ***Clair,
            Alberta***
 The
            Clair
            property is located 7 miles north of Grande Prairie, Alberta. Enterra's
            assets
            include a 100% working interest in 3,520 acres of land, 23 producing
            oil wells
            and an oil treating facility. Gas is conserved and processed at the Encana
            Sexsmith gas plant.
 
 Production
            is primarily from the Doe Creek (Dunvegan) formation with a small amount
            of gas
            production from the Charlie Lake and Halfway formations. Production is
            light,
            44 ° API
            gravity crude oil and solution gas from the Doe Creek oil pool. One additional
            dually completed Charlie Lake and Halfway gas well also produces. At
            December 2005 there were 23 oil wells and one gas well producing a combined
            1950 bbl/d of oil and 1400 mcf/d of raw solution gas on a working interest
            basis
            before royalties. To date, Enterra has drilled or re-completed 29 wells
            for oil
            and seven wells for water injection. There are no further drilling plans
            for the
            pool. The pool is currently being water flooded to optimize the recovery
            of
            hydrocarbons.
  -24-
  Total
            remaining net proved reserves assigned by McDaniel & Associates to the Doe
            Creek 'A' (Dunvegan) pool are 1,141 mbbl of oil, 955 mmcf of gas and
            67 mbbl of
            natural gas liquids. Included in the total net proved reserves of Clair
            are
            reserves assigned to the 13-07-073-5W6 Charlie Lake / Halfway gas well
            of 358
            mmcf of gas and 24 mbbl of natural gas liquids.
 
 Enterra
            also owns and operates a central oil treating facility at Clair, which
            is
            connected into the Pembina Peace Pipeline system.
 
 ***Provost-Alliance-Wainwright,
            Alberta***
 The
            Provost-Alliance-Wainwright producing area is located near Provost, Alberta.
            Major areas within the package are Alliance, Sounding Lake, Hansman Lake,
            Halkirk, Monitor, Provost Cummings "Y" Unit and Wainwright. Enterra's
            assets
            include an average working interest of 80% in 84,454 gross acres of land
            as well
            as 371 producing oil and gas wells. Production is obtained primarily
            from the
            Dina, Cummings and Belly River formations. Enterra's December share of
            current
            production for the entire area is 1,513 bbl/d of oil and NGLs and 1,563
            mcf/d of
            gas on a working interest basis before royalties. In order to optimize
            production and lower operating costs, Enterra has and continues to optimize
            down
            hole pumps to maximize oil production and upgrade or consolidate oil
            batteries
            to handle higher volumes of total fluid and injection water. Solution
            gas is
            currently conserved at most of the oil batteries.
 
 In
            2004
            and 2005 Enterra with its partner JED Oil Inc. drilled 21 oil wells in
            the
            Cummings "Y" Unit to bring the total number of oil producers to 37. In
            order to
            lower operating costs and optimize reserve recovery from the Cummings
            "Y" pool,
            Enterra constructed a central facility to ship clean oil and re-inject
            produced
            water into the pool. Significant field performance improvements will
            result from
            full activation of the water flood in 2006.
 
 McDaniel
            & Associates assigned net proved reserves in the Provost-Alliance-Wainwright
            area of 1787 mbbl of oil, 2,450 mmcf of natural gas and 32.4 mbbl of
            natural gas
            liquids.
 
 ***Princess
            area***
 The
            Princess area assets were acquired from RMEC, and are now being operated
            under
            RMAC. Our working interest is 54% in 27,747 acres in the Princess area.
            Production is primarily from the Sunburst and Pekisko formations. Sunburst
            production consists of gas and 23 ° API
            crude
            oil. The Pekisko production consists of gas and 27 ° API
            crude
            oil. RMAC has an average working interest of 50% of 3,040 acres in the
            Tide Lake
            area. Production, consisting of 27 ° API
            oil,
            is from the Pekisko formation. In December 2005, total area working
            interest production before royalties was 516 bbl/d of oil and NGLs and
            1206
            mcf/d gas.
 
 McDaniel
            & Associates has assigned total net proved remaining reserves of 524 mbbl
            of
            oil, 1,163 mmcf of natural gas and 17 mbbl of natural gas liquids.
 
 ***Sylvan
            Lake***
 The
            Sylvan Lake property is located 24 miles west of the town of Red Deer,
            Alberta.
            Enterra's assets include an average working interest of 64% in 4312 gross
            acres
            of land as well as 25 producing oil wells. Enterra completed the development
            of
            40-acre spacing wells in the Pekisko G pool, and also drilled four subsequent
            oil wells on 20 acre spacing. At December 2005, the field was producing
            553
            bbl/day of 14 degree API oil with 413 mcf/d of associated gas. Production
            is
            flow lined into an Enterra operated central treating facility. Non-associated
            gas is conserved and flow lined to the Husky Sylvan Lake gas plant. Clean
            oil is
            trucked from the facility to sales.
 
 McDaniel
            & Associates has assigned total proved remaining reserves of 981 mbbl of
            oil, 991 mmcf of natural gas, 52 mbbl of natural gas liquids. Studies
            are being
            undertaken in 2006 to optimize the water flood of the field to improve
            oil
            recovery.
 
 ***Ferrier***
 The
            Ferrier property is located in west central Alberta where Enterra operates
            as
            well as conducts joint venture operations with other companies. The productive
            horizons are multi-zone liquids rich natural gas formations at depths
            ranging
            from 2,400 meters to 2,800 meters. The majority of the area has year
            round
            access for drilling, seismic and construction projects.
 
 Enterra
            owns various interests in 51 sections of land. The area is mainly developed
            at
            two wells per section for gas and four wells per section for oil. Since
            acquiring the High Point assets, the Trust has farmed out the drilling
            of 15
            wells, with eight on production and one awaiting tie-in. Enterra owns
            infield
            compression and dehydration facilities and pipelines in proportion to
            its well
            interests. The raw gas is processed at third party processing facilities
            to
            remove natural gas liquids. Enterra's average net production for this
            area for
            December 2005 was 4.4 mmcf/d of natural gas and 250 bbl/d of oil and
            natural gas
            liquids.
  -25-
  McDaniel
            & Associates has assigned total proved reserves of 13.7 bcf of natural
            gas
            and 799 mbbls of oil and NGLs.
 
 ***Ricinus***
 The
            Ricinus property is located in west central Alberta south of the Ferrier
            area.
            Enterra has interests varying from 6.5% to 85 per cent in 43 sections
            of land.
            Ricinus is a major exploitation area for Enterra, targeting sweet light
            oil and
            gas to depths of 3,000 meters. Since the acquisition of High Point, seven
            wells
            have been drilled under farm out terms and three are on production, with
            three
            awaiting tie-in and one well that was abandoned. Enterra operates the
            property.
            Enterra's average net production for this area for December 2005 was
            1.3 mmcf/d
            of natural gas and 104 bbls/d of oil and natural gas liquids.
 
 McDaniel
            & Associates has assigned total proved reserves of 3.9 bcf of natural gas
            and 205 mbbls of oil to the Ricinus shallow horizons.
 
 Within
            the Ricinus area, Enterra has a 50% interest in one deep, high productivity
            Leduc well anticipated to begin production in April 2006. McDaniel &
Associates has assigned additional proved plus probable gas reserves
            of 4.5 bcf
            to this well. One or two additional drill targets of a similar nature
            may exist
            on our lands.
 
 ***Lochend***
 The
            Lochend property is located west central Alberta south of Ricinus. Enterra
            has a
            21 per cent interest in 16 sections of land. The property has undergone
            extensive development over the last three years with 29 wells currently
            producing. The property is being developed at four wells per section
            for light
            oil, natural gas and natural gas liquids from the Cardium formation at
            a depth
            of approximately 2,400 meters. The area has year round access for drilling,
            seismic and construction projects. Enterra owns infield oil and gas treatment
            facilities and pipelines in proportion to its well interests. The raw
            gas is
            processed at third party processing facilities to remove natural gas
            liquids.
            Enterra's average net production for this area for December 2005 was
            0.7 mmcf/d
            of natural gas and 108 bbl/d of oil and natural gas liquids.
 
 McDaniel
            & Associates has assigned total proved reserves of 760 mmcf of natural
            gas
            and 96.4 mbbls of oil and NGLs and total proved plus probable reserves
            of 981
            mmcf of natural gas and 125 mbbls of oil and NGLs to the Lochend property.
 
 ***Desan,
            northeast British Columbia*** ******
 The
            Desan
            property is located approximately 75 miles northeast of Fort Nelson,
            British
            Columbia. The property is in the center of a well-established gas-producing
            region commonly referred to as the Greater Sierra. The majority of the
            drilling,
            seismic and project construction is carried out during the winter months.
            Enterra is the operator of the property.
 
 The
            primary producing formation is the regional Jean Marie at 1,300 meters
            that is
            being developed with horizontal well bores. Enterra's average net production
            for
            this region for December 2005 was 7.3 mmcf/d of natural gas and 54 bbls/d
            of oil
            and natural gas liquids produced from a total of 20 wells. We have 100%
            working
            interest in all wells and infrastructure, and operate all wells and compression
            facilities. McDaniel & Associates has assigned total proved reserves of 15.8
            bcf of natural gas and 104 mbbls of NGLs and total proved plus probable
            reserves
            of 20.3 bcf of natural gas and 134 mbbls of NGLs to the Desan
            property.
 
 The
            company has approximately 37,367 acres of undeveloped land at Desan and
            nearby
            similar properties at Kotcho and Peggo Pesh.
 
 ***Power
            River/Oyster Ridge, Wyoming and Montana***
 The
            Power
            River/Oyster Ridge property is located in western Wyoming, primarily
            in the
            Gillette area. Production is approximately 2.9 mmcf/d net to Enterra
            for
            December 2005. We have rights to 89,934 net acres of land, most of which
            is
            undeveloped and prospective for coal bed methane.
  -26-
  **Oil
            and Gas Wells**
 
 The
            following table summarizes the Trust's interest as at December 31, 2005
            in wells
            that are producing and non-producing:
  **Producing
                      Oil**
                  **Producing
                      Gas**
                  **Non
                      Producing**
                  **Grand
                      Total**Gross
                  Net
                  Gross
                  Net
                  Gross
                  Net
                  Gross
                  NetCanada
                  476
                  313.9
                  199
                  98.5
                  651
                  370.4
                  1,326
                  782.8US
                  0
                  0
                  65
                  56.0
                  146
                  72.6
                  211
                  128.6Total
                  476
                  313.9
                  264
                  154.5
                  797
                  443.0
                  1,537
                  911.4
 
 **Land
            Holdings**
 
 The
            following table summarizes the gross and net acres of unproved properties
            in
            which Enterra has an interest at December 31, 2005:
  Area
                  
                  Gross
                      Acres
                  
                  Net
                      AcresCanada
                  
                  
                  241,645
                  
                  
                  156,859US
                  
                  
                  127,090
                  
                  
                  84,169Total
                  
                  
                  368,735
                  
                  
                  241,028
 
 The
            number of net acres for which the Trust's rights to explore, develop
            or exploit
            will, absent further action, expire within one year are 889 acres in
            Canada and
            9,851 acres in the United States for a total of 10,740 acres.
 
 **Abandonment
            and Reclamation Costs**
 
 Enterra
            estimates well abandonment costs on an area-by-area basis. Such costs
            are
            included in the McDaniel Report and Sproule Report as deductions in arriving
            at
            future net revenue. The expected total abandonment costs included in
            the
            McDaniel Report and Sproule Report under the proved reserves category
            is $19.3
            million undiscounted ($9.4 million discounted at 10%), of which a total
            of $1.8
            million is estimated to be incurred in 2006, 2007 and 2008 to abandon
            88 wells.
 
 **Tax
            Horizon**
  ***Canadian***
 No
            cash
            Canadian income taxes have been paid by the Trust or its Canadian Operating
            Subsidiaries for the year ended December 31, 2005. Under the current
            structure,
            otherwise taxable income of the Canadian Operating Subsidiaries is sheltered
            through interest expense and other current deductions. Cash is transferred
            to
            the Trust by way of interest and redemptions of securities to the Trust.
            The
            Trust in turn, allocates all of its taxable income to the Unitholders.
            No
            Canadian income taxes are currently expected to be incurred by the Trust
            or its
            Canadian Operation Subsidiaries in 2006.
 
 ***United
            States***
 No
            U.S.
            income related cash taxes have been paid by the Trust or its U.S. Operating
            Subsidiaries for the year ended December 31, 2005. The income from Enterra's
            U.S. operations (reduced by any deductible interest expense on debt held
            by the
            Trust or its Canadian subsidiaries) is subject to United States income
            tax
            income under U.S. income tax rules and regulations. As a result, Enterra's
            U.S.
            operations may incur cash U.S. income taxes in the future. In addition,
            as funds
            are repatriated to Canada, withholding taxes that are required by U.S.
            tax law
            may become payable.
  **Costs
            Incurred**
 The
            following table summarizes the expenditures made by Enterra for the year
            ended
            December 31, 2005:
 000'sProperty
                      acquisition costs:(1)Proved
                      properties
                  
                  $
                  275,201Unproved
                      properties
                  
                  
                  120,484Exploration
                      costs
                  
                  
                  -Development
                      costs
                  
                  
                  25,895Total
                      costs incurred
                  
                  $
                  421,580
 *(1)
            Includes costs related to corporate acquisitions.*
  -27-
  **Exploration
            and Development Activities**
 
 The
            following table sets forth the gross and net exploratory and development
            wells
            that the Trust participated in during the year ended December 31, 2005.
            In the
            2 nd Amended
            and Restated Agreement of Business Principles with JED, the Trust has
            no
            interested in dry holes and has a carried interest in producing wells.
            The
            carried interest in the producing wells is shown as participated in this
            table
            for wells associated with this arrangement.
  Exploration
                  Development
                  TotalGross
                  Net
                  Gross
                  Net
                  Gross
                  NetLight
                      and Medium Oil
                  -
                  -
                  25
                  3.85
                  25
                  3.85Natural
                      Gas
                  -
                  -
                  12
                  2.9
                  12
                  2.9Service
                  -
                  -
                  2
                  0.93
                  2
                  0.93Dry
                  -
                  -
                  -
                  -
                  -
                  -Total
                  -
                  -
                  39
                  7.68
                  39
                  7.68
  **Production
            Volume by Field**
 The
            following table discloses for each important field, and in total, the
            Trust's
            production volumes for the financial year ended December 31, 2005 for
            each
            product type.
 
 Crude
                      oil (bbls)
                  NGLs
                      (bbls)
                  Natural
                      Gas
                    (Mcf)
                  BOEClair
                  830,871
                  32,896
                  395,930
                  929,755Provost
                  338,560
                  15,986
                  465,683
                  432,160Princess
                  226,229
                  6,557
                  490,347
                  314,511Sylvan
                      Lake
                  199,280
                  8,314
                  167,212
                  235,462Desan
                  -
                  8,307
                  1,106,561
                  192,734Ferrier/Ricinus
                  6,445
                  42,345
                  800,531
                  182,212Other
                      Canadian
                  258,060
                  16,301
                  833,810
                  413,329Wyoming
                  -
                  -
                  750,901
                  125,150Total
                  1,859,445
                  130,705
                  5,010,974
                  2,825,313
  -28-
  **Production
            Estimates**
 The
            following table discloses for each product type the total volume of production
            estimated by McDaniel for 2006 in the estimates of future net revenue
            from
            proved reserves disclosed above under the heading "Oil and Natural Gas
            Reserves
            and Net Present Value of Future Net Revenue". The following estimates
            are
            applicable under both constant and forecast price scenarios.
  **Enterra's
                      Average 2006 Production Estimated****Forecast
                      Prices and Costs**
  Light
                      and
                  
                  
                  
                  
                  
                  Natural
                      GasMedium
                      Oil
                  
                  Heavy
                      Oil
                  
                  Natural
                      Gas
                  
                  Liquids
                  
                  BOEReserve
                      Category
                  
                  Gross
                      [bbl/d]
                  
                  Gross
                      [bbl/d]
                  
                  Gross
                      [mcf/d]
                  
                  Gross
                      [bbl/d]
                  
                  Gross
                      [BOE/d]CANADA
                      (McDaniel Report)ProvedDeveloped
                      Producing
                  
                  
                  3,367
                  
                  
                  676
                  
                  
                  19,507
                  
                  
                  623
                  
                  
                  7,917Developed
                      Non-Producing
                  
                  
                  3
                  
                  
                  -
                  
                  
                  4,269
                  
                  
                  83
                  
                  
                  797Undeveloped
                  
                  
                  7
                  
                  
                  -
                  
                  
                  2,299
                  
                  
                  72
                  
                  
                  462Total
                      Proved
                  
                  
                  3,377
                  
                  
                  676
                  
                  
                  26,075
                  
                  
                  778
                  
                  
                  9,176Probable
                  
                  
                  209
                  
                  
                  16
                  
                  
                  1,829
                  
                  
                  72
                  
                  
                  602Total
                      Proved Plus Probable
                  
                  
                  3,586
                  
                  
                  692
                  
                  
                  27,904
                  
                  
                  850
                  
                  
                  9,778UNITED
                      STATES (Sproule Report)ProvedDeveloped
                      Producing
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2,727
                  
                  
                  -
                  
                  
                  454Developed
                      Non-Producing
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Undeveloped
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Total
                      Proved
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2,727
                  
                  
                  -
                  
                  
                  454Probable
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Total
                      Proved Plus Probable
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2,727
                  
                  
                  -
                  
                  
                  454AGGREGATEProvedDeveloped
                      Producing
                  
                  
                  3,367
                  
                  
                  676
                  
                  
                  22,234
                  
                  
                  623
                  
                  
                  8,371Developed
                      Non-Producing
                  
                  
                  3
                  
                  
                  -
                  
                  
                  4,269
                  
                  
                  83
                  
                  
                  797Undeveloped
                  
                  
                  7
                  
                  
                  -
                  
                  
                  2,299
                  
                  
                  72
                  
                  
                  462Total
                      Proved
                  
                  
                  3,377
                  
                  
                  676
                  
                  
                  28,802
                  
                  
                  778
                  
                  
                  9,630Probable
                  
                  
                  209
                  
                  
                  16
                  
                  
                  1,829
                  
                  
                  72
                  
                  
                  602Total
                      Proved Plus Probable
                  
                  
                  3,586
                  
                  
                  692
                  
                  
                  30,631
                  
                  
                  850
                  
                  
                  10,232
 
 -29-
 
 **Quarterly
            Data**
 The
            following table discloses, on a quarterly basis for the year ended December
            31,
            2005, the Trust's share of average daily production volumes, prior to
            royalties,
            average prices received, royalties paid, operating expenses incurred
            and
            netbacks on a per unit of volume basis.
  Quarter
                      ended 2005Mar
                      31
                  
                  Jun
                      30
                  
                  Sep
                      30
                  
                  Dec
                      31Average
                      Daily ProductionOil
                      (bbl/d)
                  
                  
                  5,562
                  
                  
                  4,887
                  
                  
                  4,858
                  
                  
                  5,078NGL
                      (bbl/d)
                  
                  
                  182
                  
                  
                  125
                  
                  
                  435
                  
                  
                  684Natural
                      Gas (mcf/d)
                  
                  
                  6,125
                  
                  
                  5,867
                  
                  
                  17,945
                  
                  
                  24,727Combined
                      (BOE/d)
                  
                  
                  6,765
                  
                  
                  5,990
                  
                  
                  8,284
                  
                  
                  9,883Average
                      Prices ReceivedOil
                      ($/bbl)
                  
                  
                  51.22
                  
                  
                  57.17
                  
                  
                  69.60
                  
                  
                  56.83NGL
                      ($/bbl)
                  
                  
                  40.90
                  
                  
                  52.69
                  
                  
                  50.66
                  
                  
                  57.65Natural
                      Gas ($/mcf)
                  
                  
                  6.79
                  
                  
                  7.09
                  
                  
                  8.78
                  
                  
                  8.82NetbackRevenues
                      - combined ($/BOE)
                  
                  
                  49.36
                  
                  
                  54.69
                  
                  
                  62.50
                  
                  
                  55.26Royalties
                      - combined ($/BOE)
                  
                  
                  9.89
                  
                  
                  12.21
                  
                  
                  13.76
                  
                  
                  14.21Operating
                      Expenses - combined ($/BOE)
                  
                  
                  11.12
                  
                  
                  13.11
                  
                  
                  10.10
                  
                  
                  12.11Netback
                      Received - combined ($/BOE)
                  
                  
                  28.35
                  
                  
                  29.37
                  
                  
                  38.64
                  
                  
                  28.95
  -30-
  **Additional
            Information respecting Enterra Energy Trust** ****
  **The
            Trust Indenture**
 The
            principal undertaking of the Trust is to issue Trust Units and to acquire
            and
            hold debt instruments, securities, royalties and other interests. The
            Operating
            Subsidiaries of the Trust carry on the business of acquiring and holding
            interests in petroleum and natural gas properties and assets related
            thereto.
            Cash flow from the properties is flowed from the Trust Subsidiaries to
            the Trust
            primarily through (i) payments of interest and principal in respect of
            the
            Series Notes, (ii) payments of interest and principal in respect of the
            CT
            Notes, and (iii) dividends declared on the common shares of certain Operating
            Subsidiaries and/or redemptions of preferred shares of certain Operating
            Subsidiaries, which amounts are transferred from EECT to the Trust as
            payments
            of interest or principal on the CT Notes. Cash flow received by the Trust
            is
            distributed to the Unitholders on a monthly basis. See "Distributions".
  Under
            the
            terms of the Trust Indenture, the Trust was created for the purposes
            of:
  ·
                  acquiring
                      the Series Notes and CT Notes;
 ·
                  investing
                      in the EECT Units;
 ·
                  acquiring,
                      holding, transferring and disposing of, investing in and otherwise
                      dealing
                      with assets, securities (whether debt or equity) and other
                      interests
                      (including royalty interests) or properties of whatever nature
                      or kind of,
                      or issued by, EEC, EECT or any other entity in which the Trust
                      owns,
                      directly or indirectly, 50% or more of the outstanding voting
                      securities,
                      including, without limitation, bodies corporate, partnerships
                      or
                      trusts;
 ·
                  borrowing
                      funds or otherwise obtaining at any time and from time to time
                      or
                      otherwise incurring any indebtedness for any of the purposes
                      set forth in
                      the Trust Indenture;
 ·
                  disposing
                      of any part of the property of the
                      Trust;
 ·
                  temporarily
                      holding cash and other short term investments in connection
                      with and for
                      the purposes of the Trust's activities, including paying administration
                      and trust expenses, paying any amounts required in connection
                      with the
                      redemption of Trust Units and making distributions to Unitholders;
 ·
                  issuing
                      Trust Units, instalment receipts, and other securities (whether
                      debt or
                      equity) of the Trust (including securities convertible into
                      or
                      exchangeable for Trust Units or other securities of the Trust,
                      or
                      warrants, options or other rights to acquire Trust Units or
                      other
                      securities of the Trust), for the purposes
                      of:
 (i)
                  obtaining
                      funds to conduct the activities described above, including
                      raising funds
                      for further acquisitions;
 (ii)
                  repaying
                      of any indebtedness or borrowings of the Trust or any affiliate
                      thereof,
                      including the Series Notes and the CT
                      Notes;
 (iii)
                  establishing
                      and implementing Unitholders rights plans, distribution reinvestment
                      plans, Trust Unit purchase plans, and incentive option and
                      other
                      compensation plans of the Trust, if
                      any;
 (iv)
                  satisfying
                      obligations to deliver securities of the Trust, including Trust
                      Units,
                      pursuant to the terms of securities convertible into or exchangeable
                      for
                      such securities of the Trust, whether or not such convertible
                      or
                      exchangeable securities have been issued by the Trust;
                      and
 (v)
                  making
                      non-cash distributions to Unitholders as contemplated by the
                      Trust
                      Indenture including distributions pursuant to distribution
                      reinvestment
                      plans, if any, established by the
                      Trust;
 ·
                  guaranteeing
                      the obligations of its affiliates pursuant to any debt for
                      borrowed money
                      or any other obligation incurred by such entity in good faith
                      for the
                      purpose of carrying on its business, and pledging securities
                      and other
                      property owned by the Trust as security for any obligations
                      of the Trust,
                      including obligations under any
                      guarantee;
 ·
                  repurchasing
                      or redeeming Trust Units or other securities of the Trust,
                      subject to the
                      provisions of the Trust Indenture and applicable law;
                      and
 ·
                  engaging
                      in all activities incidental or ancillary to any of the
                      foregoing.
 
 **Trust
            Units and Other Securities**
  ***Trust
            Units***
 An
            unlimited number of Trust Units may be created and issued pursuant to
            the Trust
            Indenture. Each Trust Unit entitles the holder thereof to one vote at
            any
            meeting of the holders of Trust Units and represents an equal fractional
            undivided beneficial interest in any distribution from the Trust (whether
            of net
            income, net realized capital gains or other amounts) and in any net assets
            of
            the Trust in the event of termination or winding up of the Trust. All
            Trust
            Units rank among themselves equally and ratably without discrimination,
            preference or priority. Each Trust Unit is transferable, is not subject
            to any
            conversion or pre-emptive rights and entitles the holder thereof to require
            the
            Trust to redeem any or all of the Trust Units held by such holder (see
            "Redemption Right"). In addition, in certain circumstances Unitholders
            will have
            the right to instruct the trustees of EECT with respect to the voting
            of common
            shares of Enterra held by EECT at meetings of holders of common shares
            of EEC.
            See "Meetings of Unitholders" and "Exercise of Voting Rights".
  -31-
  The
            price
            per Trust Unit is a function of anticipated distributable income generated
            by
            the Trust and the ability of the Trust to effect long-term growth in
            the value
            of the Trust's assets. The market price of the Trust Units is sensitive
            to a
            variety of market conditions including, but not limited to, interest
            rates,
            commodity prices and our ability to acquire additional assets. Changes
            in market
            conditions may adversely affect the trading price of the Trust
            Units.
  The
            Trust
            Units do not represent a traditional investment and should not be viewed
            by
            investors as "shares" in either Trust or the Trust Subsidiaries. Unitholders
            do
            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.
  The
            Trust
            Units are not "deposits" within the meaning of the Canada Deposit Insurance
            Corporation Act (Canada) and are not insured under the provisions of
            that Act or
            any other legislation. Furthermore, the 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.
  ***Series
            Notes***
 The
            Series Notes are subordinated to senior indebtedness of the Trust and
            bear
            interest at various annual rates, expire at various dates up to 2033
            and the
            principal amounts of the notes vary as additional funds are loaned from
            the
            Trust to the Operating Subsidiaries are principal repayments are made
            on the
            notes. Interest is be payable for each month during the term on the
            15 th day of
            the month following such month. The Series Notes are unsecured debt obligations
            of Operating Subsidiaries and are subordinated to all senior indebtedness
            of
            Enterra.
  ***CT
            Notes***
 CT
            Notes
            are subordinated, demand participating promissory notes. The CT Notes
            were
            issued by EECT to the Trust. Redemptions and returns of capital on shares
            of EEC
            held by EECT may be made from time to time and applied as prepayments
            of the
            principal amount of the CT Notes. The CT Notes will bear interest at
            a rate that
            is re-set from time to time so as to approximate the return on investments
            held
            by EECT.
  **Income
            Streams** ****
 A
            portion
            of the cash flows generated by the assets held, directly or indirectly,
            by the
            Trust is distributed to Unitholders. The Trustee may, in respect of any
            period,
            declare payable to the Unitholders all or any part of the net income
            of the
            Trust, less all expenses and liabilities of the Trust due and accrued
            and which
            are chargeable to the net income of the Trust. The Trust's primary sources
            of
            cash flow are payments of interest and repayments of principal from the
            Trust
            Subsidiaries in respect of indebtedness of each of those entities to
            and in
            favor of the Trust.
  **Unitholder
            Limited Liability**
 The
            Trust
            Indenture provides that no Unitholder, in its capacity as such, shall
            incur or
            be subject to any liability in contract or in tort in connection with
            the Trust
            or its obligations or affairs and, in the event that a court determines
            that
            Unitholders are subject to any such liabilities, the liabilities will
            be
            enforceable only against, and will be satisfied only out of the Trust's
            assets.
            Pursuant to the Trust Indenture, the Trust will indemnify and hold harmless
            each
            Unitholder from any costs, damages, liabilities, expenses, charges or
            losses
            suffered by a Unitholder from or arising as a result of such Unitholder
            not
            having such limited liability.
  The
            Trust
            Indenture provides that all contracts signed by or on behalf of the Trust
            must
            contain a provision to the effect that such obligation will not be binding
            upon
            Unitholders personally. Notwithstanding the terms of the Trust Indenture,
            Unitholders may not be protected from liabilities of the Trust to the
            same
            extent a shareholder is protected from the liabilities of a corporation.
            Personal liability may also arise in respect of claims against the Trust
            (to the
            extent that claims are not satisfied by the Trust) that do not arise
            under
            contracts, including claims in tort, claims for taxes and possibly certain
            other
            statutory liabilities. The possibility of any personal liability to Unitholders
            of this nature arising is considered unlikely in view of the fact that
            the sole
            activity of the Trust is to hold securities, and all of the business
            operations
            are carried on by the Operating Subsidiaries.
  The
            activities of the Trust and the Trust Subsidiaries are conducted in such
            a way,
            upon advice of counsel, and in such jurisdictions as to avoid as far
            as possible
            any material risk of liability to the Unitholders for claims against
            the Trust
            including by obtaining appropriate insurance, where available, for the
            operations of the Operating Subsidiaries and by having contracts signed
            by or on
            behalf of the Trust include a provision that such obligations are not
            binding
            upon Unitholders personally.
  -32-
  **Issuance
            of Trust Units**
 The
            Trust
            Indenture provides that Trust Units, including rights, warrants (including
            so
            called "special warrants" which may be exercisable for no additional
            consideration) and other securities to purchase, to convert into or to
            exchange
            into Trust Units, may be created, issued, sold and delivered on such
            terms and
            conditions and at such times as the Board of Directors may determine,
            including,
            without limitation, installment or subscription receipts. The Trust Indenture
            also provides that EEC may authorize the creation and issuance of debentures,
            notes and other evidences of indebtedness of the Trust, which debentures,
            notes
            or other evidences of indebtedness may be created and issued from time
            to time
            on such terms and conditions to such persons and for such consideration
            as EEC
            may determine.
  **Trustee**
 Olympia
            Trust Company is the initial trustee of the Trust. The Trustee is responsible
            for, among other things, accepting subscriptions for Trust Units and
            issuing
            Trust Units pursuant thereto, maintaining the books and records of the
            Trust and
            providing timely reports to Unitholders. The Trust Indenture provides
            that the
            Trustee shall exercise its powers and carry out its functions thereunder
            as
            trustee honestly, in good faith and in the best interests of the Trust
            and the
            Unitholders and, in connection therewith, shall exercise that degree
            of care,
            diligence and skill that a reasonably prudent trustee would exercise
            in
            comparable circumstances.
  The
            initial term of the Trustee's appointment is until the third annual meeting
            of
            Unitholders. The Unitholders shall, at the third annual meeting of Unitholders,
            re-appoint, or appoint a successor to the Trustee for an additional three
            year
            term, and thereafter, the Unitholders shall reappoint or appoint a successor
            to
            the Trustee at the annual meeting of Unitholders three years following
            the
            reappointment or appointment of the successor to the Trustee. The Trustee
            may
            also be removed by Special Resolution of the Unitholders. Such resignation
            or
            removal becomes effective upon the acceptance or appointment of a successor
            trustee.
  **Delegation
            of Authority, Administration and Trust Governance**
 The
            Board
            of Directors has generally been delegated the significant management
            decisions
            of the Trust. In particular, pursuant to the Trust Indenture, the Trustee
            has
            delegated to EEC responsibility for any and all matters relating to the
            following: (i) an offering of securities of the Trust; (ii) ensuring
            compliance
            with all applicable laws, including in relation to an offering of securities
            of
            the Trust; (iii) all matters relating to the content of any offering
            documents,
            the accuracy of the disclosure contained therein and the certification
            thereof;
            (iv) all matters concerning the terms of, and amendment from time to
            time of the
            material contracts of the Trust; (v) all matters concerning any underwriting
            or
            agency agreement providing for the sale of Trust Units or rights to Trust
            Units;
            (vi) all matters relating to the redemption of Trust Units; and (vii)
            all
            matters relating to the voting rights on any instruments held by the
            Trust,
            other than the EECT.
  In
            addition, pursuant to an administration agreement dated November 25,
            2003
            between the Trust and EEC (the "Administration Agreement"), EEC has been
            appointed the administrator of the Trust and is responsible for the
            administration and management of all general and administrative affairs
            of the
            Trust. EEC is not entitled to the payment of a fee for the services provided
            to
            the Trust pursuant to the Administration Agreement. At December 31, 2005,
            Enterra Energy employed 24 office employees and 33 field operations employees
            for a total of 57 employees.
  The
            Trust, JED and JMG are parties to a 2nd Amended and Restated Agreement
            of
            Business Principles Pursuant to the 2 nd Amended
            and Restated Agreement of Business Principles, the Trust appointed JED
            as the
            operator or contract operator of the Operating Subsidiaries' development
            drilling of oil and gas assets and JMG the operator or contract operator
            of the
            Operating Subsidiaries' exploration drilling of oil and gas assets. New
            asset
            acquisitions by an Operating Subsidiary will be drilled by JED if the
            prospect
            has proved production, or by JMG if it does not. The Trust has a first
            right to
            purchase assets owned by JED and a right to purchase 80% of interests
            of JMG
            when JMG has done sufficient exploratory drilling to prove commercially
            viable
            quantities of hydrocarbons, at a value established from an independent
            reserve
            report. Both the Trust and JMG will farm out development drilling to
            JED on the
            basis that JED will pay 100% of the development costs to earn 70% of
            working
            interests. On an individual basis, the terms of the agreement can be
            varied to
            meet specific situations with mutual agreement of the affected parties.
  -33-
  **Liability
            of The Trustee**
 The
            Trustee, its directors, officers, employees, shareholders and agents
            are not
            liable to any Unitholder or any other person, in tort, contract or otherwise,
            in
            connection with any matter pertaining to the Trust or the property of
            the Trust,
            arising from the exercise by the Trustee of any powers, authorities or
            discretion conferred under the Trust Indenture, including, without limitation,
            any action taken or not taken in good faith in reliance on any documents
            that
            are, prima facie, properly executed, any depreciation of, or loss to,
            the
            property of the Trust incurred by reason of the sale of any asset, any
            inaccuracy in any evaluation provided by any other appropriately qualified
            person, any reliance on any such evaluation, any action or failure to
            act of
            EEC, or any other person to whom the Trustee has, with the consent of
            EEC,
            delegated any of its duties hereunder, or any other action or failure
            to act
            (including failure to compel in any way any former trustee to redress
            any breach
            of trust or any failure by EEC to perform its duties under or delegated
            to it
            under the Trust Indenture or any other contract), unless such liabilities
            arise
            out of the gross negligence, willful default or fraud of the Trustee
            or any of
            its directors, officers, employees or shareholders. If the Trustee has
            retained
            an appropriate expert, adviser or legal counsel with respect to any matter
            connected with its duties under the Trust Indenture, the Trustee may
            act or
            refuse to act based on the advice of such expert, adviser or legal counsel,
            and
            the Trustee shall not be liable for and shall be fully protected from
            any loss
            or liability occasioned by any action or refusal to act based on the
            advice of
            any such expert, adviser or legal counsel. In the exercise of the powers,
            authorities or discretion conferred upon the Trustee under the Trust
            Indenture,
            the Trustee is and shall be conclusively deemed to be acting as Trustee
            of the
            assets of the Trust and shall not be subject to any personal liability
            for any
            debts, liabilities, obligations, claims, demands, judgments, costs, charges
            or
            expenses against or with respect to the Trust or the property of the
            Trust. In
            addition, the Trust Indenture contains other customary provisions limiting
            the
            liability of the Trustee.
  **Special
            Voting Rights**
 The
            Trust
            Indenture allows for the creation and issuance of an unlimited number
            of special
            voting rights ("Special Voting Rights") which will enable the Trust to
            provide
            voting rights to holders of Exchangeable Shares issued by certain Trust
            Subsidiaries and, in the future, to holders of other exchangeable shares
            that
            may be issued by Enterra or other subsidiaries of the Trust in connection
            with
            other exchangeable share transactions.
  Holders
            of Special Voting Rights are not entitled to any distributions of any
            nature
            whatsoever from the Trust. Each holder shall be entitled to attend at
            meetings
            of Unitholders and, subject to the terms of the instrument creating the
            Special
            Voting Rights, is entitled to that number of votes equal to the number
            of votes
            attached to the Trust Units for which the securities relating to such
            Special
            Voting Rights held by such holder are exchangeable, exercisable or convertible.
            Holders of Special Voting Rights are also entitled to receive all notices,
            communications or other documentation required to be given or otherwise
            sent to
            Unitholders. Except for the right to attend and vote at meetings of Unitholders
            and receive notices, communications and other documentation sent to Unitholders,
            the Special Voting Rights do not confer upon the holders thereof any
            other
            rights.
  **Redemption
            Right**
 Trust
            Units are redeemable at any time on demand by the holders thereof upon
            delivery
            to the transfer agent of the Trust of the certificate or certificates
            representing such Trust Units, accompanied by a duly completed and properly
            executed notice requiring redemption. Upon receipt of the notice to redeem
            Trust
            Units by the transfer agent, the holder thereof shall only be entitled
            to
            receive a price per Trust Unit (the "Market Redemption Price") equal
            to the
            lesser of: (i) 90% of the "market price" of the Trust Units on the principal
            market on which the Trust Units are quoted for trading during the 10
            trading day
            period commencing immediately after the date on which the Trust Units
            are
            tendered to the Trust 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 so tendered for redemption. Where more than
            one market
            exists for the Trust Units, the principal market shall mean the market
            on which
            the Trust Units experience the greatest volume of trading activity on
            the date
            or for the period in question, as applicable.
  For
            the
            purposes of this calculation, "market price" is an amount equal to the
            simple
            average of the closing price of the Trust Units for each of the trading
            days on
            which there was a closing price; provided that, if the applicable exchange
            or
            market does not provide a closing price but only provides the highest
            and lowest
            prices of the Trust Units traded on a particular day, the market price
            shall be
            an amount equal to the simple average of the average of the highest and
            lowest
            prices for each of the trading days on which there was a trade; and provided
            further that if there was trading on the applicable exchange or market
            for fewer
            than five of the 10 trading days, the market price shall be the simple
            average
            of the following prices established for each of the 10 trading days:
            the average
            of the last bid and last ask prices for each day on which there was no
            trading;
            the closing price of the Trust Units for each day that there was trading
            if the
            exchange or market provides a closing price; and the average of the highest
            and
            lowest prices of the Trust Units for each day that there was trading,
            if the
            market provides only the highest and lowest prices of Trust Units traded
            on a
            particular day. The closing market price is: an amount equal to the closing
            price of the Trust Units if there was a trade on the date; an amount
            equal to
            the average of the highest and lowest prices of the Trust Units if there
            was
            trading and the exchange or other market provides only the highest and
            lowest
            prices of Trust Units traded on a particular day; and the average of
            the last
            bid and last ask prices if there was no trading on the date.
  -34-
  The
            aggregate Market Redemption Price payable by the Trust in respect of
            any Trust
            Units surrendered for redemption during any calendar month shall be satisfied
            by
            way of a cash payment on the last day of the following month. The entitlement
            of
            Unitholders to receive cash upon the redemption of their Trust Units
            is subject
            to the limitation that the total amount payable by the Trust in respect
            of such
            Trust Units and all other Trust Units tendered for redemption in the
            same
            calendar month and in any preceding calendar month during the same year
            shall
            not exceed $100,000; provided that Enterra may, in its sole discretion,
            waive
            such limitation in respect of any calendar month. If this limitation
            is not so
            waived, the Market Redemption Price payable by the Trust in respect of
            Trust
            Units tendered for redemption in such calendar month shall be paid on
            the last
            day of the following month as follows: (i) firstly, by the Trust distributing
            Series Notes having an aggregate principal amount equal to the aggregate
            Market
            Redemption Price of the Trust Units tendered for redemption, and (ii)
            secondly,
            to the extent that the Trust does not hold Series Notes having a sufficient
            principal amount outstanding to effect such payment, by the Trust issuing
            its
            own promissory notes to the Unitholders who exercised the right of redemption
            having an aggregate principal amount equal to any such shortfall (herein
            referred to as "Redemption Notes"). Notwithstanding the foregoing, the
            distribution of any Series Notes and the issuance of any Redemption Notes
            shall
            be conditional upon the receipt of all necessary regulatory approvals
            and the
            making of all necessary governmental registrations, declarations and
            filings,
            including, without limitation, any required registration of the Series
            Notes or
            Redemption Notes, as applicable, to be distributed or issued in respect
            of the
            payment of the Market Redemption Price, and any required qualification
            of the
            Trust Indenture relating to such Series Notes or Redemption Notes, as
            the case
            may be, under the securities laws of the United States.
  If
            at the
            time Trust Units are tendered for redemption by a Unitholder, (i) the
            outstanding Trust Units are not listed for trading on the TSX or NASDAQ
            and are
            not traded or quoted on any other stock exchange or market which Enterra
            considers, in its sole discretion, provides representative fair market
            value
            price for the Trust Units, or (ii) trading of the outstanding Trust Units
            is
            suspended or halted on any stock exchange on which the Trust Units are
            listed
            for trading or, if not so listed, on any market on which the Trust Units
            are
            quoted for trading, on the date such Trust Units are tendered for redemption
            or
            for more than five trading days during the 10 trading day period, commencing
            immediately after the date such Trust Units were tendered for redemption
            then
            such Unitholder shall, instead of the Market Redemption Price, be entitled
            to
            receive a price per Trust Unit (the "Appraised Redemption Price") equal
            to 90%
            of the fair market value thereof as determined by Enterra as at the date
            on
            which such Trust Units were tendered for redemption. The aggregate Appraised
            Redemption Price payable by the Trust in respect of Trust Units tendered
            for
            redemption in any calendar month shall be paid on the last day of the
            third
            following month by, at the option of the Trust: (i) a cash payment; or
            (ii) a
            distribution of Series Notes and/or Redemption Notes as described
            above.
  It
            is
            anticipated that this redemption right will not be the primary mechanism
            for
            holders of Trust Units to dispose of their Trust Units. Series Notes
            or
            Redemption Notes, which may be distributed in specie to Unitholders in
            connection with a redemption, will not be listed on any stock exchange
            and no
            market is expected to develop in such Series Notes or Redemption Notes.
            Series
            Notes or Redemption Notes may not be qualified investments for trusts
            governed
            by registered retirement savings plans, registered retirement income
            funds,
            deferred profit sharing plans and registered education savings
            plans.
  **Meetings
            of Unitholders**
 The
            Trust
            Indenture provides that meetings of Unitholders must be called and held
            for,
            among other matters, the election or removal of the Trustee, the appointment
            or
            removal of the auditors of the Trust, the approval of amendments to the
            Trust
            Indenture (except as described under "Amendments to the Trust Indenture"),
            the
            sale of the property of the Trust as an entirety or substantially as
            an
            entirety, and the commencement of winding up the affairs of the
            Trust.
  A
            meeting
            of Unitholders may be convened at any time and for any purpose by the
            Trustee
            and must be convened, except in certain circumstances, if requisitioned
            in
            writing by (i) EEC or (ii) the holders of Trust Units and Special Voting
            Rights
            holding in aggregate not less than 5% of the votes entitled to be voted
            at a
            meeting of Unitholders. A requisition must, among other things, state
            in
            reasonable detail the business purpose for which the meeting is to be
            called.
  Unitholders
            may attend and vote at all meetings of Unitholders either in person or
            by proxy
            and a proxy holder need not be a Unitholder. Two persons present in person
            or
            represented by proxy and representing in the aggregate at least 5% of
            the votes
            attaching to all outstanding Trust Units shall constitute a quorum for
            the
            transaction of business at all such meetings. For the purposes of determining
            such quorum, the holders of any issued Special Voting Rights who are
            present at
            the meeting shall be regarded as representing outstanding Trust Units
            equivalent
            in number to the votes attaching to such Special Voting Rights.
  -35-
  The
            Trust
            Indenture contains provisions as to the notice required and other procedures
            with respect to the calling and holding of meetings of Unitholders in
            accordance
            with the requirements of applicable laws.
  **Exercise
            of Voting Rights**
 The
            Trustee is prohibited from authorizing or approving:
  (a)
                  any
                      sale, lease or other disposition of, or any interest in, all
                      or
                      substantially all of the assets owned, directly or indirectly,
                      by the
                      Trust, except in conjunction with an internal reorganization
                      of the direct
                      or indirect assets of the Trust, as a result of which the Trust
                      has
                      substantially the same interest, whether direct or indirect,
                      in the assets
                      as the interest, whether direct or indirect, that it had prior
                      to the
                      reorganization;
  (b)
                  any
                      merger, amalgamation, arrangement, reorganization, recapitalization,
                      business combination or similar transaction involving the Trust
                      and any
                      other corporation, except in conjunction with an internal reorganization
                      as referred to in paragraph (a) above;
                      or
  (c)
                  the
                      winding up, liquidation or dissolution of the Trust prior to
                      the end of
                      the term of the Trust except in conjunction with an internal
                      reorganization as referred to in paragraph (a)
                      above;
  without
            the prior approval of the Unitholders by Special Resolution at a meeting
            of
            Unitholders called for that purpose.
  In
            addition, the Trustee is prohibited from authorizing EECT to vote any
            shares of
            Enterra in respect of:
  (a)
                  any
                      sale, lease or other disposition of, or any interest in, all
                      or
                      substantially all of the assets owned, directly or indirectly,
                      by EEC, the
                      Trust or EPP, except in conjunction with an internal reorganization
                      of the
                      direct or indirect assets of EEC, EECT or EPP, as the case
                      may be, as a
                      result of which EECT has substantially the same interest, whether
                      direct
                      or indirect, in the assets as the interest, whether direct
                      or indirect,
                      that it had prior to the
                      reorganization;
  (b)
                  any
                      merger, amalgamation, arrangement, reorganization, recapitalization,
                      business combination or similar transaction involving EEC,
                      EECT or EPP and
                      any other corporation, except in conjunction with an internal
                      reorganization as referred to in paragraph (a)
                      above;
  (c)
                  the
                      winding up, liquidation or dissolution of EEC, EECT or EPP
                      prior to the
                      end of the term of EECT, except in conjunction with an internal
                      reorganization as referred to in paragraph (a)
                      above;
  (d)
                  any
                      amendment to the articles of EEC to increase or decrease the
                      minimum or
                      maximum number of directors;
  (e)
                  any
                      material amendments to the articles of EEC to change the authorized
                      share
                      capital or amend the rights, privileges, restrictions and conditions
                      attaching to any class of EEC's shares in a manner which may
                      be
                      prejudicial to EECT; or
  (f)
                  any
                      material amendment to the CT Indenture or the Partnership Agreement
                      which
                      may be prejudicial to EECT;
  without
            the prior approval of the Unitholders by Special Resolution at a meeting
            of
            Unitholders called for that purpose.
  Finally,
            the Trustee is prohibited from authorizing EECT to vote any shares of
            EEC with
            respect to any matter which under applicable law (including policies
            of Canadian
            securities commissions) or applicable stock exchange rules would require
            the
            approval of the holders of shares of EEC by ordinary resolution or special
            resolution, without the prior approval of the Unitholders by ordinary
            resolution
            or special resolution, as the case may be.
  **Amendments
            to the Trust Indenture**
 The
            Trust
            Indenture may be amended or altered from time to time by Special Resolution
            of
            the Unitholders. The Trustee may, without the approval of any of the
            Unitholders, amend the Trust Indenture for the purpose of:
  (a)
                  ensuring
                      the Trust's continuing compliance with applicable laws or requirements
                      of
                      any governmental agency or
                      authority;
  -36-
  (b)
                  ensuring
                      that the Trust will satisfy the provisions of each of subsections
                      108(2)
                      and 132(6) and paragraph 132(7)(a) of the Tax Act as from time
                      to time
                      amended or replaced;
  (c)
                  providing
                      for and ensuring (i) the allocation of items of income, gain,
                      loss,
                      deduction and credit in respect of the Trust for United States
                      federal
                      income tax purposes; (ii) the filing of income tax returns
                      necessary or
                      desirable for the purposes of United States federal income
                      tax; or (iii)
                      compliance by the Trust with any other applicable provisions
                      of United
                      States federal income tax law;
  (d)
                  ensuring
                      that such additional protection is provided for the interests
                      of
                      Unitholders as the Trustee may consider
                      expedient;
  (e)
                  removing
                      or curing any conflicts or inconsistencies between the provisions
                      of the
                      Trust Indenture or any supplemental indenture and any other
                      agreement of
                      the Trust or any offering document pursuant to which securities
                      of the
                      Trust are issued with respect to the Trust, or any applicable
                      law or
                      regulation of any jurisdiction, provided that in the opinion
                      of the
                      Trustee the rights of the Trustee and of the Unitholders are
                      not
                      prejudiced thereby;
  (f)
                  curing,
                      correcting or rectifying any ambiguities, defective or inconsistent
                      provisions, errors, mistakes or omissions, provided that in
                      the opinion of
                      the Trustee the rights of the Trustee and of the Unitholders
                      are not
                      prejudiced thereby; and
  (g)
                  changing
                      the situs of or the laws governing the Trust, which, in the
                      opinion of the
                      Trustee, is desirable in order to provide Unitholders with
                      the benefit of
                      any legislation limiting their
                      liability.
  **Takeover
            Bid**
 The
            Trust
            Indenture contains provisions to the effect that if a takeover bid is
            made for
            the Trust Units and not less than 90% of the Trust Units (other than
            Trust Units
            held at the date of the takeover bid by or on behalf of the offeror or
            associates or affiliates of the offeror) are taken up and paid for by
            the
            offeror, the offeror will be entitled to acquire the Trust Units held
            by
            Unitholders who did not accept the take-over bid on the terms offered
            by the
            offeror. In the event of a take-over bid for Trust Units, any holder
            of a
            security exchangeable directly indirectly into Trust Units may, unless
            prohibited by the terms and conditions of such exchangeable security,
            convert,
            exercise or exchange such exchangeable security for the purpose of tendering
            Trust Units to the take-over bid, unless an identical offer is made by
            the
            offeror to purchase such exchangeable security.
  **Termination
            of the Trust**
 Unitholders
            may vote to terminate the Trust at any meeting of Unitholders duly called
            for
            that purpose, subject to the following: (a) a vote may only be held if
            requested
            in writing by the holders of not less than 20% of the outstanding Trust
            Units;
            (b) a quorum of 50% of the issued and outstanding Trust Units must be
            present in
            person or by proxy; and (c) the termination must be approved by Special
            Resolution of Unitholders.
  Unless
            the Trust is earlier terminated or extended by vote of the Unitholders,
            the
            Trust shall continue in full force and effect for a period which shall
            end
            twenty-one years after the date of death of the last surviving issue
            of Her
            Majesty, Queen Elizabeth II. In the event that the Trust is wound up,
            the
            Trustee will sell and convert into money the property of the Trust in
            one
            transaction or in a series of transactions at public or private sale
            and do all
            other acts appropriate to liquidate the property of the Trust in accordance
            with
            any applicable laws or requirements of any governmental agency or authority,
            and
            shall in all respects act in accordance with the directions, if any,
            of the
            Unitholders in respect of termination authorized pursuant to the Special
            Resolution of the Unitholders authorizing the termination of the Trust.
            After
            paying, retiring or discharging or making provision for the payment,
            retirement
            or discharge of all known liabilities and obligations of the Trust and
            providing
            for indemnity against any other outstanding liabilities and obligations,
            the
            Trustee shall distribute the remaining part of the proceeds of the sale
            of the
            assets together with any cash forming part of the property of the Trust
            among
            the Unitholders in accordance with their pro rata interests.
  **Reporting
            to Unitholders**
 An
            independent recognized firm of chartered accountants audits the financial
            statements of the Trust annually. The audited consolidated financial
            statements
            of the Trust, together with the report of such chartered accountants,
            will be
            mailed by the Trustee to Unitholders and the unaudited interim financial
            statements of the Trust will be mailed to Unitholders within the periods
            prescribed by securities legislation. The year-end of the Trust is December
            31.
            The Trust is subject to the continuous disclosure obligations under all
            applicable securities legislation.
  -37-
  The
            Trust
            is subject to the reporting requirements of the 1934 Act applicable to
            foreign
            private issuers, and in connection therewith will file or submit reports,
            including annual reports and other information with the U.S. Securities
            and
            Exchange Commission (the "SEC"). Such reports and other information can
            be
            inspected and copied at the public reference facilities maintained by
            the SEC at
            450 Fifth Street, N.W., Room 1024, Judiciary Plaza, Washington, D.C.
            The Trust's
            SEC filings and submissions will also be available to the public on the
            SEC's
            web site at http://www.sec.gov .
  **Additional
            Information of Enterra Energy** ****
  Enterra
            Energy has generally been delegated responsibility relating to significant
            management and operational decisions involving the Trust and the crude
            oil and
            natural gas properties underlying the Trust. See "Additional Information
            Respecting the Trust - Delegation of Authority, Administration and Trust
            Governance".
  **Directors
            and Officers**
 The
            Board
            of Enterra Energy currently consists of four individuals. The directors
            are
            elected by EECT at the direction of Unitholders by ordinary resolution,
            and hold
            office until the next annual meeting of Unitholders, which is scheduled
            for May
            11, 2006.
  The
            following table sets forth certain information respecting the directors
            and
            officers of Enterra Energy.
  **Name
                      and Municipality**
                    **of
                      Residence**
                  
                  **Position
                      Held**
                  
                  **Date
                      First Elected or**
                    **Appointed
                      as Director**Reginald
                      J. Greenslade(2) (3)*
                    Calgary,
                      Alberta
                  
                  Director
                      and Chairman*
                  
                  2003Herman
                      S. (Scobey) Hartley(1) (3)(4)
                    Calgary,
                      Alberta
                  
                  Director
                  
                  2003Norman
                      Wallace(1) (2)
                    Saskatoon,
                      Saskatchewan
                  
                  Director
                  
                  2003William
                      E. Sliney(1)(2)(3)(4)
                    San
                      Ramon, California
                  
                  Director
                  
                  2004E.
                      Keith Conrad(4)
                    Calgary,
                      Alberta
                  
                  Director,
                      President and Chief Executive Officer
                  
                  2005John
                      Kalman
                    Calgary,
                      Alberta
                  
                  Chief
                      Financial Officer
                  
                  2005John
                      F. Reader
                    Calgary,
                      Alberta
                  
                  Vice-President,
                      Operations and Engineering
                  
                  2005
 
 *Notes:*
 *(1)*  *Member
            of Audit Committee*
 *(2)*  *Member
            of Compensation Committee*
 *(3)*  *Member
            of Reserves Committee*
 *(4)*  *Member
            of Corporate Governance Committee*
 **
            Mr.
            Greenslade announced that he will be resigning as Chairman of Enterra
            Energy
            effective March 31, 2006.*
  The
            directors and executive officers of Enterra Energy, as a group, beneficially
            owned, directly or indirectly, or exercised control or direction over,
            410,820
            Trust Units, representing approximately 1.125% of the issued and outstanding
            Trust Units (as of December 31, 2005), and 24,973 Exchangeable Shares.
            Profiles
            of Enterra Energy's directors and executive officers and the particulars
            of
            their respective principal occupations during the last five years are
            set forth
            below.
  *Reginald
            (Reg) J. Greenslade, Director and Chairman*
 Mr. Greenslade
            was President, CEO and Director of Old Enterra from the fall of 2001
            until
            November 2003 and continued as Chairman of Enterra Energy after the Enterra
            Arrangement. Following the resignation of the CEO and president on
            January 15, 2005, Mr. Greenslade was appointed President and CEO in
            addition to his duties as Chairman of the Board until the appointment
            of
            Mr. Conrad as President and CEO on June 1, 2005. On January 27, 2006,
            the Trust and JED announced that Mr. Greenslade would be resigning as
            Chairman
            of the Trust effective March 31, 2006. Mr. Greenslade was a director
            of PASW
            Inc., a software development company, from February 2001 to July 2001.
            From 1995 until the formation of Enterra Energy, Mr. Greenslade was the
            President, CEO and Director of Big Horn Resources Ltd. Prior to his position
            with Big Horn, Mr. Greenslade was with CS Resources Limited in the areas
            of
            exploitation engineering and project management from 1993 to 1995. Prior
            to
            1993, Saskatchewan Oil and Gas Corporation employed Mr. Greenslade in the
            capacities of project management, production, and reservoir engineering.
  -38-
  *Herman
            S. (Scobey) Hartley, Director*
 Mr.
            Hartley has a Bachelor of Science degree in Geology from Texas Tech University.
            Mr. Hartley has been a director of Enterra Energy since May 2000. Mr.
            Hartley
            was the President of Prism Petroleum Ltd. and a predecessor company from
            December 1990 through December 1996. Mr. Hartley has been the Chairman
            of Prism
            Petroleum Ltd. since January 1997. Mr. Hartley has served as the President
            of
            Faster Oilfield Services since June 1995, and was the President of Cayenne
            Energy Corp. from 1990 to 1996. Mr. Hartley was the President and a Director
            of
            Scaffold Connection Corporation from February 2000 to November 2001.
            Mr. Hartley
            has been a Director of Cathedral Energy Services Ltd. since June
            2001.
  *Norman
            Wallace, Director*
 Mr.
            Wallace has been a director of Enterra Energy since May 2000. Mr. Wallace
            resigned as a director of Old Enterra in August 2001 and was reappointed
            in June
            2002. He has been the owner of Wallace Construction Specialties Ltd.
            since 1972.
            Mr. Wallace received a Bachelor of Commerce degree from the University
            of
            Saskatchewan in 1968.
 
 *William
            E. Sliney, Director*
 Mr.
            Sliney became a director of Enterra Energy on March 19, 2004. He has
            been the
            president of PASW, Inc. since August 2001 and was chairman from October
            2000 to
            August 2001. Previously Mr. Sliney was the Chief Financial Officer for
            Legacy
            Software Inc. from 1995 to 1998. Mr. Sliney holds a masters degree in
            business
            administration from the University of California at Los Angeles.
  *E.
            Keith Conrad, Director, President and Chief Executive Officer*
 Mr.
            Conrad has over 40 years of business experience, the last 20 years directly
            involved with executive management in the oil and gas industry. Mr. Conrad
            has been Chairman of Macon Resources Ltd., a private company involved
            in the
            management of and investment in private and public companies in the oil
            and gas
            industry, since 1997. In addition to Macon Resources Ltd., Mr. Conrad
            has been a
            director or officer of the following companies: Petroflow Energy Ltd.,
            Shaker
            Resources Inc., High Point Resources Ltd., Mesquite Exploration Ltd.,
            Draig
            Energy Inc., Brigadier Energy Ltd., Serenpet Inc., AM Technologies Limited
            and
            Torex Resources Inc. at various times from 1990 to the present. Mr. Conrad
            holds Bachelors of Arts and Law Degrees from the University of Alberta.
            All the
            above companies were publicly traded in the U.S., Canada, or both, during
            the
            periods indicated.
  *John
            Kalman, Chief Financial Officer*
 Mr. Kalman
            is a Chartered Accountant with over 23 years of business experience, the
            last 17 years involved in senior financial positions within the oil and gas
            industry. Mr. Kalman has been the Vice President, Finance & CFO of
            Macon Resources Ltd. since November 2004. From January 2004 to
            October 2004 Mr. Kalman was an independent consultant providing
            various accounting services to the oil and gas industry. Prior thereto,
            from
            October 1999 to December 2003 he was Vice President, Finance and CFO
            of Gauntlet Energy Corporation a junior oil and gas exploration and development
            company. Prior thereto, he was Vice President, Finance and CFO of First
            Calgary
            Petroleums Ltd., a junior international oil and gas exploration company.
            Mr. Kalman holds a Bachelor of Commerce Degree from the University of
            Calgary. All the above companies were publicly traded in the U.S., Canada,
            or
            both, during the periods indicated.
  *John
            F. Reader, Vice-President, Operations and Engineering*
 Mr.
            Reader is a Professional Geological Engineer with over 25 years of resource
            industry experience. Most recently he culminated an 18-year career with
            ChevronTexaco Corporation as Canadian Business Development manager, with
            prior
            experience as Mergers and Acquisitions manager, and various other supervisory
            roles. As Business Development manager for JED, he provided deal origination,
            evaluation, negotiation, and transaction advisory services to JED, Enterra
            Energy and JMG Exploration Inc. Mr. Reader was appointed Vice-President,
            Operations and Engineering of Enterra Energy in October 2005.
  ***Cease
            Trade Orders, Bankruptcies, Penalties or Sanctions***
 With
            the
            exception of the items listed in Appendix "D", no director or executive
            officer
            of Enterra Energy is, as at the date hereof, or has been, within the
            10 years
            prior to the date hereof, a director or executive officer of any company
            that,
            while that person was acting in that capacity,
  (a)
                  was
                      the subject of a cease trade or similar order or an order that
                      denied such
                      company access to any exemption under securities legislation
                      for a period
                      of more than 30 consecutive days,
  (b)
                  was
                      subject to an event that resulted, after the director or executive
                      officer
                      ceased to be a director or executive officer, in the company
                      being the
                      subject of a cease trade or similar order or an order that
                      denied such
                      company access to any exemption under securities legislation
                      for a period
                      of more than 30 consecutive days,
                      or
  -39-
  (c)
                  within
                      a year of such person ceasing to act in such capacity, became
                      bankrupt,
                      made a proposal under any legislation relating to bankruptcy
                      or insolvency
                      or was subject to or instituted any proceedings, arrangement
                      or compromise
                      with creditors or had a receiver, receiver manager or trustee
                      appointed to
                      hold its assets.
  In
            addition, no director or executive officer of Enterra Energy has, within
            the 10
            years prior to the date hereof, become bankrupt, made a proposal under
            any
            legislation relating to bankruptcy or insolvency, or become subject to
            or
            instituted any proceedings arrangement or compromise with creditors,
            or had a
            receiver, receiver manager or trustee appointed to hold the assets of
            such
            director or officer.
  ***Conflicts
            of Interest***
 Circumstances
            may arise where members of the board of directors or officers of Enterra
            Energy
            are directors or officers of corporations, which are in competition to
            the
            interests of the Trust or the Trust Subsidiaries. No assurances can be
            given
            that opportunities identified by such board members or officers will
            be provided
            to the Trust or the Trust Subsidiaries. In accordance with *Business
            Corporations Act* (Alberta), a director or officer who is a party to a material contract
            or
            proposed material contract with the Trust or the Trust Subsidiaries or
            is a
            director or an officer of or has a material interest in any person who
            is a
            party to a material contract or proposed material contract with the Trust
            or the
            Trust Subsidiaries shall disclose to Enterra Energy the nature and extent
            of the
            director's or officer's interest. In addition, a director shall not vote
            on any
            resolution to approve a contract of the nature described except in limited
            circumstances.
  **Description
            of Securities**
 EEC
            is
            authorized to issue an unlimited number of common shares, an unlimited
            number of
            various classes of preferred shares and an unlimited number of exchangeable
            shares, issuable in series. EECT is the sole holder of all of the issued
            and
            outstanding common shares and preferred shares of EEC.
  ***Common
            Shares*** ******
 Each
            common share entitles its holder to receive notice of and to attend all
            meetings
            of the shareholders of EEC and to one vote at such meetings. The holders
            of
            common shares will be, at the discretion of the Board of Directors and
            subject
            to applicable legal restrictions and to certain preferences of holders
            of
            Exchangeable Shares and preferred shares, entitled to receive any dividends
            declared by the Board of Directors on the common shares to the exclusion
            of the
            holders of Exchangeable Shares, subject to the proviso that no dividends
            shall
            be paid on the common shares unless all declared dividends on the outstanding
            Exchangeable Shares and any other shares having priority over the common
            shares
            with respect to the payment of dividends have been paid in full. The
            holders of
            common shares will be entitled to share equally in any distribution of
            the
            assets of EEC upon the liquidation, dissolution, bankruptcy or winding
            up of EEC
            or other distribution of its assets among its shareholders for the purpose
            of
            winding up its affairs. Such participation is subject to the rights,
            privileges,
            restrictions and conditions attaching to the Exchangeable Shares and
            any other
            shares having priority over the common shares.
  ***Preferred
            Shares***
 EEC
            is
            authorized to issue an unlimited number of preferred shares in various
            classes.
            The preferred shares can be redeemed at any time by EEC or at the request
            of the
            holder. Preferred shares of each class will rank prior to the common
            shares and
            to the Exchangeable Shares with respect to the payment of dividends,
            if any,
            that have been declared and the distribution of assets in the event of
            the
            liquidation, dissolution or winding up of EEC.
  ***Exchangeable
            Shares***
 The
            following is a summary description of the material provisions of the
            EEC
            Exchangeable Shares and the related rights of holders of EEC Exchangeable
            Shares, and thereafter is a description of the terms of the Voting and
            Exchange
            Trust Agreement and the Support Agreement related to the EEC Exchangeable
            Shares. **** This
            summary is qualified in its entirety by reference to the full text of
            (i) the EEC Exchangeable Share provisions, (ii) the Support Agreement,
            and (iii) the Voting and Exchange Trust Agreement,
  Each
            EEC
            Exchangeable Share has economic rights (including the right to have the
            exchange
            ratio adjusted to account for distributions paid to Unitholders) and
            voting
            rights equivalent to those of the Trust Units into which they are exchangeable
            from time to time. In addition, holders of EEC Exchangeable Shares have
            the
            right to receive Trust Units at any time in exchange for their EEC Exchangeable
            Shares, on the basis of the exchange ratio in effect at the time of the
            exchange. Holders of EEC Exchangeable Shares do not receive cash distributions
            from the Trust or EEC. Rather, the exchange ratio is adjusted to account
            for
            distributions paid to Unitholders. As of December 31, 2005, there were
            348,146
            EEC Exchangeable Shares outstanding.
  -40-
  The
            EEC
            Exchangeable Shares rank ratably with shares of any other series of exchangeable
            shares of EEC and prior to the common shares and any other shares ranking
            junior
            to the EEC Exchangeable Shares with respect to the payment of dividends,
            if any,
            that have been declared and the distribution of assets in the event of
            the
            liquidation, dissolution or winding up of EEC. Holders of EEC Exchangeable
            Shares are entitled to receive cash dividends if, as and when declared
            by the
            Board of Directors. In the event that any such dividends are paid, the
            exchange
            ratio will be correspondingly reduced to reflect such dividends.
  EEC
            will
            not, without obtaining the approval of the holders of the EEC Exchangeable
            Shares as set forth below under "- Amendment and Approval":
  (a)
                  pay
                      any dividend on the common shares or any other shares ranking
                      junior to
                      the EEC Exchangeable Shares, other than stock dividends payable
                      in common
                      shares or any other shares ranking junior to the EEC Exchangeable
                      Shares;
  (b)
                  redeem,
                      purchase or make any capital distribution in respect of the
                      common shares
                      or any other shares ranking junior to the EEC Exchangeable
                      Shares;
  (c)
                  redeem
                      or purchase any other shares of EEC ranking equally with the
                      EEC
                      Exchangeable Shares with respect to the payment of dividends
                      or on any
                      liquidation distribution; or
  (d)
                  amend
                      the articles or by laws of EEC in any manner that would affect
                      the rights
                      or privileges of the holders of EEC Exchangeable
                      Shares.
  The
            restrictions in (a), (b) and (c) above shall not apply if all declared
            dividends
            on the outstanding EEC Exchangeable Shares shall have been paid in
            full.
  *Liquidation
            or Insolvency of EEC*
 In
            the
            event of the liquidation, dissolution or winding up of EEC or any other
            proposed
            distribution of the assets of EEC among its shareholders for the purpose
            of
            winding up its affairs, a holder of EEC Exchangeable Shares will be entitled
            to
            receive from EEC, in respect of each such EEC Exchangeable Share, that
            number of
            Trust Units equal to the exchange ratio as at the effective date of such
            event.
  Upon
            the
            occurrence of such an event, the Trust and Exchangeco will each have
            the
            overriding right to purchase all, but not less than all, of the EEC Exchangeable
            Shares then outstanding (other than EEC Exchangeable Shares held by the
            Trust or
            any subsidiary of the Trust) at a purchase price per EEC Exchangeable
            Share to
            be satisfied by the issuance or delivery, as the case may be, of that
            number of
            Trust Units equal to the exchange ratio at such time and, upon the exercise
            of
            this right, the holders thereof will be obligated to sell such EEC Exchangeable
            Shares to the Trust or Exchangeco, as applicable. This right may be exercised
            by
            either the Trust or Exchangeco.
  Upon
            the
            occurrence of an insolvency event (as specified in the EEC Exchangeable
            Share
            provisions), the Voting and Exchange Trust Agreement Trustee on behalf
            of the
            holders of the EEC Exchangeable Shares will have the right to require
            the Trust
            or Exchangeco to purchase any or all of the EEC Exchangeable Shares then
            outstanding and held by such holders at a purchase price per EEC Exchangeable
            Share to be satisfied by the issuance or delivery, as the case may be,
            of that
            number of Trust Units equal to the exchange ratio at such time, as described
            under "-Voting and Exchange Trust Agreement - Optional Exchange
            Right".
  *Automatic
            Exchange Right on Liquidation of the Trust*
 The
            Voting and Exchange Trust Agreement provides that in the event of a Trust
            liquidation event, as described below, the Trust or Exchangeco will be
            deemed to
            have purchased all outstanding EEC Exchangeable Shares and each holder
            of EEC
            Exchangeable Shares will be deemed to have sold their EEC Exchangeable
            Shares
            immediately prior to such Trust liquidation event at a purchase price
            per EEC
            Exchangeable Share to be satisfied by the issuance or delivery, as the
            case may
            be, of that number of Trust Units equal to the exchange ratio at such
            time.
            "Trust liquidation event" means:
  (a)
                  any
                      determination by the Trust to institute voluntary liquidation,
                      dissolution
                      or winding up proceedings in respect of the Trust or to effect
                      any other
                      distribution of assets of the Trust among the Unitholders for
                      the purpose
                      of winding up its affairs; or
  (b)
                  the
                      earlier of, the Trust receiving notice of and the Trust otherwise
                      becoming
                      aware of, any threatened or instituted claim, suit, petition
                      or other
                      proceedings with respect to the involuntary liquidation, dissolution
                      or
                      winding up of the Trust or to effect any other distribution
                      of assets of
                      the Trust among the Unitholders for the purpose of winding
                      up its affairs
                      in each case where the Trust has failed to contest in good
                      faith such
                      proceeding within 30 days of becoming aware
                      thereof.
  -41-
  *Retraction
            of EEC Exchangeable Shares by Holders and Retraction Call
            Right*
 Subject
            to the Retraction Call Right (defined below) of the Trust and Exchangeco,
            a
            holder of EEC Exchangeable Shares will be entitled at any time to require
            EEC to
            redeem any or all of the EEC Exchangeable Shares held by such holder
            for a
            retraction price (the "Retraction Price") per EEC Exchangeable Share
            equal to
            the value of that number of Trust Units equal to the exchange ratio as
            at the
            date of redemption (the "Retraction Date"), to be satisfied by the delivery
            of
            such number of Trust Units. Fractional Trust Units will not be delivered.
            Any
            amount payable on account of the Retraction Price that includes a fractional
            Trust Unit will be rounded down to the nearest whole number of Trust
            Units.
            Holders of the EEC Exchangeable Shares may request redemption by presenting
            to
            EEC or the transfer agent for the EEC Exchangeable Shares a certificate
            or
            certificates representing the number of EEC Exchangeable Shares the holder
            desires to have redeemed, together with a duly executed retraction request
            and
            such other documents as may be reasonably required. Subject to revocation
            as
            described below, the redemption will become effective on the Retraction
            Date,
            which will be seven business days after the date on which EEC or the
            transfer
            agent receives the retraction notice. Unless otherwise requested by the
            holder
            and agreed to by EEC, the Retraction Date will not occur on such seventh
            business day if such day would occur between any distribution record
            date and
            the distribution payment date that corresponds to such distribution record
            date.
            In this case, the Retraction Date will instead occur on such distribution
            payment date. This will ensure that the exchange ratio used in connection
            with
            such redemption is increased to account for the distribution.
  When
            a
            holder requests EEC to redeem the EEC Exchangeable Shares, the Trust
            and
            Exchangeco will have an overriding right (the "Retraction Call Right")
            to
            purchase on the Retraction Date, all but not less than all, of the EEC
            Exchangeable Shares that the holder has requested EEC to redeem at a
            purchase
            price per EEC Exchangeable Share equal to the Retraction Price, to be
            satisfied
            by the delivery of that number of Trust Units equal to the exchange ratio
            at
            such time. At the time of a retraction request by a holder of EEC Exchangeable
            Shares, EEC will immediately notify the Trust and Exchangeco. The Trust
            or
            Exchangeco must then advise EEC within two business days as to whether
            the
            Retraction Call Right will be exercised. A holder may revoke his or her
            retraction request at any time prior to the close of business on the
            last
            business day immediately preceding the Retraction Date, in which case
            the
            holder's EEC Exchangeable Shares will neither be purchased by the Trust
            or
            Exchangeco nor be redeemed by EEC. If the holder does not revoke his
            or her
            retraction request, the EEC Exchangeable Shares that the holder has requested
            EEC to redeem will on the Retraction Date be purchased by the Trust or
            Exchangeco or redeemed by EEC, as the case may be, in each case at a
            purchase
            price per EEC Exchangeable Share equal to the Retraction Price. In addition,
            a
            holder of EEC Exchangeable Shares may elect to instruct the Voting and
            Exchange
            Trust Agreement Trustee to exercise the optional exchange right (the
            "Optional
            Exchange Right") to require the Trust or Exchangeco to acquire such holder's
            EEC
            Exchangeable Shares in circumstances where neither the Trust nor Exchangeco
            have
            exercised the Retraction Call Right. See "Voting and Exchange Trust Agreement
            -
            Optional Exchange Right".
  The
            Retraction Call Right may be exercised by either the Trust or Exchangeco.
            If, as
            a result of solvency provisions of applicable law, EEC is not permitted
            to
            redeem all EEC Exchangeable Shares tendered by a retracting holder, EEC
            will
            redeem only those EEC Exchangeable Shares tendered by the holder as would
            not be
            contrary to such provisions of applicable law. The holder of any EEC
            Exchangeable Shares not redeemed by EEC will be deemed to have required
            the
            Trust to purchase such unretracted EEC Exchangeable Shares in exchange
            for Trust
            Units on the Retraction Date pursuant to the Optional Exchange Right.
            See
            "Voting and Exchange Trust Agreement - Optional Exchange Right".
  *Redemption
            of EEC Exchangeable Shares*
 Subject
            to applicable law and the Redemption Call Right of the Trust and Exchangeco,
            EEC:
 (a)
                  will,
                      on the Automatic Redemption Date (specified in the EEC Exchangeable
                      Share
                      provisions), redeem all, but not less than all, of the then
                      outstanding
                      EEC Exchangeable Shares for a redemption price per EEC Exchangeable
                      Share
                      equal to the value of that number of Trust Units equal to the
                      exchange
                      ratio as at that Redemption Date (as that term is defined below)
                      (the
                      "Redemption Price"), to be satisfied by the delivery of such
                      number of
                      Trust Units; and
 (b)
                  may,
                      at any time when the aggregate number of issued and outstanding
                      EEC
                      Exchangeable Shares is less than 1,000,000 (other than EEC
                      Exchangeable
                      Shares held by the Trust and its subsidiaries and as such shares
                      may be
                      adjusted from time to time) (collectively with the Automatic
                      Redemption
                      Date, a "Redemption Date"), redeem all but not less than all
                      of the then
                      outstanding EEC Exchangeable Shares for the Redemption Price
                      per EEC
                      Exchangeable Share (unless contested in good faith by the Trust),
                      to be
                      satisfied by the delivery of such number of Trust
                      Units.
  EEC
              will,
              at least 45 days prior to any Redemption Date, provide the registered
              holders of
              the EEC Exchangeable Shares with written notice of the prospective
              redemption of
              the EEC Exchangeable Shares.
  -42-
  The
            Trust
            and Exchangeco will have the right (the "Redemption Call Right"),
            notwithstanding a proposed redemption of the EEC Exchangeable Shares
            by EEC on
            the applicable Redemption Date, pursuant to the EEC Exchangeable Share
            provisions, to purchase on any Redemption Date all, but not less than
            all, of
            the EEC Exchangeable Shares then outstanding (other than EEC Exchangeable
            Shares
            held by the Trust or its subsidiaries) in exchange for the Redemption
            Price per
            EEC Exchangeable Share and, upon the exercise of the Redemption Call
            Right, the
            holders of all of the then outstanding EEC Exchangeable Shares will be
            obliged
            to sell all such shares to the Trust or Exchangeco, as applicable. If
            either the
            Trust or Exchangeco exercises the Redemption Call Right, then EEC's right
            to
            redeem the EEC Exchangeable Shares on the applicable Redemption Date
            will
            terminate. The Redemption Call Right may be exercised by either the Trust
            or
            Exchangeco.
  *Voting
            Rights*
 Except
            as
            required by applicable law, the holders of the EEC Exchangeable Shares
            are not
            entitled as such to receive notice of or attend any meeting of the shareholders
            of EEC or to vote at any such meeting. Holders of EEC Exchangeable Shares
            will
            have the notice and voting rights respecting meetings of the Trust that
            are
            provided in the Voting and Exchange Trust Agreement. See "Voting and
            Exchange
            Trust Agreement - Voting Rights".
  *Amendment
            and Approval*
 The
            rights, privileges, restrictions and conditions attaching to the EEC
            Exchangeable Shares may be changed only with the approval of the holders
            thereof. Any such approval or any other approval or consent to be given
            by the
            holders of the EEC Exchangeable Shares will be sufficiently given if
            given in
            accordance with applicable law and subject to a minimum requirement that
            such
            approval or consent be evidenced by a resolution passed by not less than
            two
            thirds of the votes cast thereon (other than shares beneficially owned
            by the
            Trust, or any of its subsidiaries and other affiliates) at a meeting
            of the
            holders of the EEC Exchangeable Shares duly called and held at which
            holders of
            at least 10% of the then outstanding EEC Exchangeable Shares are present
            in
            person or represented by proxy. In the event that no such quorum is present
            at
            such meeting within one half hour after the time appointed therefore,
            then the
            meeting will be adjourned to such place and time (not less than ten days
            later)
            as may be determined at the original meeting and the holders of EEC Exchangeable
            Shares present in person or represented by proxy at the adjourned meeting
            will
            constitute a quorum thereat and may transact the business for which the
            meeting
            was originally called. At the adjourned meeting, a resolution passed
            by the
            affirmative vote of not less than two thirds of the votes cast thereon
            (other
            than shares beneficially owned by the Trust or any of its subsidiaries
            and other
            affiliates) will constitute the approval or consent of the holders of
            the EEC
            Exchangeable Shares.
  **Voting
            and Exchange Trust Agreement**
 
 *Voting
            Rights*
 In
            accordance with the Voting and Exchange Trust Agreement, the Trust issued
            Special Voting Rights to the Voting and Exchange Trust Agreement Trustee,
            for
            the benefit of the holders (other than the Trust and Exchangeco) of the
            EEC
            Exchangeable Shares. The Special Voting Right carries a number of votes,
            exercisable at any meeting at which Unitholders are entitled to vote,
            equal to
            the number of Trust Units (rounded down to the nearest whole number)
            into which
            the outstanding EEC Exchangeable Shares are then exchangeable multiplied
            by the
            number of votes to which the holder of one Trust Unit is then entitled.
            With
            respect to any written consent sought from the Unitholders, each vote
            attached
            to the Special Voting Right is exercisable in the same manner as set
            forth
            above.
  Each
            holder of an EEC Exchangeable Share on the record date for any meeting
            at which
            Unitholders are entitled to vote will be entitled to instruct the Voting
            and
            Exchange Trust Agreement Trustee to exercise that number of votes attached
            to
            the Special Voting Right which relate to the EEC Exchangeable Shares
            held by
            such holder. The Voting and Exchange Trust Agreement Trustee will exercise
            each
            vote attached to the Special Voting Right only as directed by the relevant
            holder and, in the absence of instructions from a holder as to voting,
            will not
            exercise such votes.
  The
            Voting and Exchange Trust Agreement Trustee will send to the holders
            of the EEC
            Exchangeable Shares the notice of each meeting at which the Unitholders
            are
            entitled to vote, together with the related meeting materials, a statement
            as to
            the current exchange ratio and the manner in which the holder may instruct
            the
            Voting and Exchange Trust Agreement Trustee to exercise the votes attaching
            to
            the Special Voting Right, at the same time as the Trust sends such notice
            and
            materials to the Unitholders. The Voting and Exchange Trust Agreement
            Trustee
            will also send to the holders' copies of all information statements,
            interim and
            annual financial statements, reports and other materials sent by the
            Trust to
            the Unitholders at the same time as such materials are sent to the Unitholders.
            To the extent such materials are provided to the Voting and Exchange
            Trust
            Agreement Trustee by the Trust, the Voting and Exchange Trust Agreement
            Trustee
            will also send to the holders all materials sent by third parties to
            Unitholders, including dissident proxy circulars and tender and exchange
            offer
            circulars, as soon as possible after such materials are first sent to
            Unitholders.
  All
            rights of a holder of EEC Exchangeable Shares to exercise votes attached
            to the
            Special Voting Right will cease upon the exchange of all such holder's
            EEC
            Exchangeable Shares for Trust Units. With the exception of administrative
            changes for the purpose of adding covenants for the protection of the
            holders of
            the EEC Exchangeable Shares, making necessary amendments or curing ambiguities
            or clerical errors (in each case provided that the board of directors
            of
            Exchangeco and EEC are of the opinion that such amendments are not prejudicial
            to the interests of the holders of the EEC Exchangeable Shares), the
            Voting and
            Exchange Trust Agreement may not be amended without the approval of the
            holders
            of the EEC Exchangeable Shares.
  -43-
  *Optional
            Exchange Right*
 Upon
            the
            occurrence and during the continuance of:
 (a)
                  an
                      insolvency event; or
 (b)
                  circumstances
                      in which the Trust or Exchangeco may exercise certain call
                      rights held by
                      them, but elect not to exercise such call
                      rights;
 a
            holder
            of EEC Exchangeable Shares will be entitled to instruct the Voting and
            Exchange
            Trust Agreement Trustee to exercise the Optional Exchange Right with
            respect to
            any or all of the EEC Exchangeable Shares held by such holder, thereby
            requiring
            the Trust or Exchangeco to purchase such EEC Exchangeable Shares from
            the
            holder. Immediately upon the occurrence of (i) an insolvency event,
            (ii) any event which will, with the passage of time or the giving of
            notice, become an insolvency event, or (iii) the election by the Trust and
            Exchangeco not to exercise a call right which is then exercisable by
            the Trust
            and Exchangeco, EEC, the Trust or Exchangeco will give notice thereof
            to the
            Voting and Exchange Trust Agreement Trustee. As soon as practicable thereafter,
            the Voting and Exchange Trust Agreement Trustee will then notify each
            affected
            holder of EEC Exchangeable Shares (who has not already provided instructions
            respecting the exercise of the Optional Exchange Right) of such event
            or
            potential event and will advise such holder of its rights with respect
            to the
            Optional Exchange Right.
  The
            purchase price payable by the Trust or Exchangeco for each EEC Exchangeable
            Share to be purchased under the Optional Exchange Right will be satisfied
            by the
            issuance of that number of Trust Units equal to the exchange ratio as
            at the day
            of closing of the purchase and sale of such EEC Exchangeable Shares under
            the
            Optional Exchange Right.
  If,
            as a
            result of solvency provisions of applicable law, EEC is unable to redeem
            all of
            a holder's EEC Exchangeable Shares which such holder is entitled to have
            redeemed in accordance with the EEC Exchangeable Share Provisions, the
            holder
            will be deemed to have exercised the Optional Exchange Right with respect
            to the
            unredeemed EEC Exchangeable Shares and the Trust or Exchangeco will be
            required
            to purchase such shares from the holder in the manner set forth
            above.
  **Support
            Agreement**
 
 *Trust
            Support Obligation*
 Under
            the
            Support Agreement, the Trust agrees that:
 (a)
                  the
                      Trust will take all actions and do all things necessary to
                      ensure that EEC
                      is able to pay to the holders of the EEC Exchangeable Shares
                      the
                      liquidation amount in the event of a liquidation, dissolution
                      or winding
                      up of EEC, the Retraction Price in the event of a retraction
                      request by a
                      holder of EEC Exchangeable Shares, or the Redemption Price
                      in the event of
                      a redemption of EEC Exchangeable Shares by EEC;
                      and
 (b)
                  the
                      Trust will not vote or otherwise take any action or omit to
                      take any
                      action causing the liquidation, dissolution or winding up of
                      EEC.
 The
            Support Agreement also provides that the Trust will not issue or distribute
            to
            the holders of all or substantially all of the outstanding Trust
            Units:
 (a)
                  additional
                      Trust Units or securities convertible into Trust
                      Units;
 (b)
                  rights,
                      options or warrants for the purchase of Trust Units;
                      or
 (c)
                  units
                      or securities of the Trust other than those in (a) or (b) above,
                      evidences
                      of indebtedness of the Trust or other assets of the
                      Trust;
 unless
            the same or an equivalent distribution is made to holders of EEC Exchangeable
            Shares, an equivalent change is made to the EEC Exchangeable Shares,
            such
            issuance or distribution is made in connection with a distribution reinvestment
            plan instituted for holders of Trust Units or a Unitholders rights protection
            plan approved for holders of Trust Units by the Board of Directors or
            the
            approval of holders of EEC Exchangeable Shares has been obtained.
  In
            addition, the Trust may not subdivide, reduce, consolidate, reclassify
            or
            otherwise change the terms of the Trust Units unless an equivalent change
            is
            made to the EEC Exchangeable Shares or the approval of the holders of
            EEC
            Exchangeable Shares has been obtained.
  In
            the
            event of any proposed take-over bid, issuer bid or similar transaction
            affecting
            the Trust Units, the Trust will use reasonable efforts to take all actions
            necessary or desirable to enable holders of EEC Exchangeable Shares to
            participate in such transaction to the same extent and on an economically
            equivalent basis as the Unitholders.
  -44-
  With
            the
            exception of administrative changes for the purpose of adding covenants
            for the
            protection of the holders of the EEC Exchangeable Shares, making certain
            necessary amendments or curing ambiguities or clerical errors (in each
            case
            provided that such amendments are not prejudicial to the interests of
            the
            holders of the EEC Exchangeable Shares), the Support Agreement may not
            be
            amended without the approval of the holders of the EEC Exchangeable
            Shares.
  Under
            the
            Support Agreement, the Trust agrees to not exercise any voting rights
            attached
            to the EEC Exchangeable Shares owned by it or any of its respective subsidiaries
            and other affiliates on any matter considered at meetings of holders
            of EEC
            Exchangeable Shares (including any approval sought from such holders
            in respect
            of matters arising under the Support Agreement).
  **RMAC
            Exchangeable Shares**
  The
            share
            attributes of the RMAC Exchangeable Shares and the ancillary rights of
            holders
            thereof, are substantially the same, in all material respects, subject
            to minor
            changes and variations as necessary in the context, to the share attributes
            of
            the EEC Exchangeable Shares and the ancillary rights of holders thereof.
            RMAC
            entered into a support agreement and voting and exchange trust agreement
            with
            respect to the RMAC Exchangeable Shares substantially similar to the
            Support
            Agreement and the Voting and Exchange Trust Agreement. Due to this similarity,
            for a summary description of the share attributes of the RMAC Exchangeable
            Shares and the ancillary rights of holders thereof see "Additional Information
            of Enterra Energy - Description of Securities -Exchangeable Shares,"
            "Additional
            Information of Enterra Energy - Voting and Exchange Trust Agreement"
            and
            "Additional Information of Enterra Energy - Support Agreement". This
            summary is
            qualified in its entirety by reference to the full text of (i) the RMAC
            Exchangeable Share provisions, and (ii) the related support agreement
            and voting
            and exchange trust agreement. As at December 31, 2005 there were 659,116
            RMAC
            Exchangeable Shares outstanding.
  **RMG
            Exchangeable Shares**
  Pursuant
            to the acquisition of RMG in June 1, 2005, the holders of RMG shares
            were
            issued, as partial consideration for the acquisition of their shares,
            RMG
            Exchangeable Shares. The exchange of RMG Exchangeable Shares will occur
            automatically on June 1, 2006 and each holder of an RMG Exchangeable
            Share will
            receive one Trust Unit in exchange for each such exchangeable share so
            held. As
            at December 31, 2005 there were 736,842 RMG Exchangeable Shares
            outstanding.
  The
            rights attaching to the RMG Exchangeable Shares, as well as the terms
            of a
            support agreement entered into regarding the RMG Exchangeable Shares,
            are
            summarized below.
  *Exchange
            of RMG Exchangeable Shares*
 In
            the
            event of a liquidation, dissolution or winding up of Enterra US Acqco
            prior to
            June 1, 2006, a holder of RMG Exchangeable Shares will receive one Trust
            Unit
            for each RMG Exchangeable Share held by such holder. Such Trust Units
            will be
            received through the automatic exercise of redemption rights held by
            Enterra US
            Acqco unless the overriding call rights granted in favour of certain
            entities
            (the "Call Right Entities") are exercised by one of such entities, as
            they
            determine in their sole discretion. Upon the exercise of these call rights,
            the
            holders of the RMG Exchangeable Shares will be obligated to sell their
            RMG
            Exchangeable Shares to the exercising Call Right Entity.
  On
            June
            1, 2006, a holder of RMG Exchangeable Shares will receive either (i)
            one Trust
            Unit for each RMG Exchangeable Share held by such holder, or (ii) one
            or more of
            a combination of class C shares, a series A note, and/or a series B note
            of
            Enterra US Acqco. Such securities will be received by holders of RMG
            Exchangeable Shares through the automatic exercise of redemption rights
            held by
            Enterra US Acqco unless the overriding call rights granted in favour
            of the Call
            Right Entities are exercised by one of such entities, as they determine
            in their
            sole discretion. Upon the exercise of these call rights, the holders
            of the RMG
            Exchangeable Shares will be obligated to sell their RMG Exchangeable
            Shares to
            the exercising Call Right Entity in exchange for receipt of Trust Units
            or, as
            the case may be, one or more of a combination of class C shares, a series
            A
            note, and/or a series B note.
  Whether
            or not Trust Units as opposed to one or more of a combination of class
            C shares,
            a series A note, and/or a series B note are issued in exchange for the
            RMG
            Exchangeable Shares is a matter determined in the sole discretion of
            Enterra US
            Acqco or the exercising Call Right Entity.
  If,
            on
            June 1, 2006, a holder of RMG Exchangeable Shares receives in exchange
            for its
            RMG Exchangeable Shares one or more of a combination of class C shares,
            a series
            A note, and/or a series B note, each such security will provide, by the
            terms
            attaching to each, for the immediate exchange thereof in return for Trust
            Units,
            with the result that each holder of RMG Exchangeable Shares will end
            up with one
            Trust Unit for each RMG Exchangeable Share formerly held by such holder.
            The
            exchange of class C shares, series A note, and/or series B note issued
            to
            holders of RMG Exchangeable Shares occurs through the mandatory exercise,
            by one
            of the Call Right Entities (as they determine in their discretion), of
            call
            rights granted by the terms of such class C shares, series A note, and/or
            series
            B note. On the exercise of these call rights, the holders of such class
            C
            shares, series A note and/or series B note (being the former holders
            of RMG
            Exchangeable Shares) will be obligated to sell those securities to the
            exercising Call Right Entity in exchange for Trust Units.
  -45-
  *Amendment
            and Approval*
 There
            may
            not be any amendment to the articles or bylaws of Enterra US Acqco, which
            would
            materially adversely affect holders of the RMG Exchangeable Shares, unless
            approval of such holders is obtained. Any such approval, or any other
            approval
            or consent to be given by the holders of the RMG Exchangeable Shares,
            must be
            evidenced by a resolution passed by not less than two thirds of the votes
            cast
            thereon (other than shares beneficially owned by the Trust, or any of
            its
            subsidiaries and other affiliates) at a meeting of the holders of the
            RMG
            Exchangeable Shares duly called and held at which holders of at least
            10% of the
            then outstanding RMG Exchangeable Shares are present in person or represented
            by
            proxy.
  *Support
            Agreement*
 Under
            a
            support agreement, Enterra US Acqco and each of the Call Right Entities
            agreed
            to duly and timely perform all of their respective obligations provided
            for in
            the RMG Exchangeable Share provisions, the class C share provisions and
            pursuant
            to the terms of the series A and B notes. In addition: (i) Enterra US
            Acqco
            agreed that, so long as any RMG Exchangeable Shares are outstanding,
            it will
            take all such actions and do all such things necessary to enable the
            Call Right
            Entities to perform their respective obligations upon exercise of their
            call
            rights under the RMG Exchangeable Share provisions; (ii) the Fund agreed
            to take
            all actions and do all things necessary to ensure that Enterra US Acqco
            and the
            other Call Right Entities, as the case may be, are able to perform their
            respective obligations to deliver Trust Units upon exercise of their
            respective
            rights under the RMG Exchangeable Share provisions, class C share provisions
            and
            the series A and B notes; and (iii) the Fund agreed to not exercise any
            vote as
            a direct or indirect shareholder of Enterra US Acqco to initiate the
            voluntary
            liquidation, dissolution or winding up of Enterra US Acqco, nor take
            any action
            or omit to take any action that is designed to result in the liquidation,
            dissolution or winding up of Enterra US Acqco, unless the prior approval
            of
            holders of RMG Exchangeable Shares is obtained. The support agreement
            may not be
            amended without the approval of the holders of the RMG Exchangeable Shares
            except in connection with: (i) amendments for the purpose of adding covenants
            for the protection of the holders of the RMG Exchangeable Shares, class
            C shares
            or series A and B notes; (ii) making amendments required to cure ambiguities,
            mistakes or errors; and (iii) making amendments which the parties to
            the support
            agreement may agree to make provided that the board of directors of Enterra
            US
            Acqco are of the good faith opinion that such amendments are not materially
            prejudicial to the interests of the holders of the RMG Exchangeable Shares,
            class C shares or series A and B notes.
  **General**
  **Competitive
            Conditions**
  All
            aspects of the oil and natural gas industry are highly competitive and
            Enterra
            actively competes with oil and natural gas and other companies, in particularly
            in the following areas: (i) exploration for and development of new sources
            of
            oil and natural gas reserves; (ii) reserve and property acquisitions;
            (iii)
            transportation and marketing of oil and natural gas and NGLs; (iv) access
            to
            services and equipment to carry out exploration, development or operating
            activities; and (v) attracting and retaining experienced industry personnel.
            The
            oil and gas industry also competes with other industries focused on providing
            alternative forms of energy to consumers. Competitive forces can lead
            to cost
            increases or result in an oversupply of oil and natural gas, both of
            which could
            have a negative impact on financial results of Enterra.
  -46-
  **Environmental
            Protection**
 Enterra's
            operations are subject to government laws and regulations concerning
            pollution,
            protection of the environment and the handling and transport of hazardous
            materials. These laws and regulations generally require Enterra to remove
            or
            remedy the effect of it activities on the environmental present and former
            operating sites, including dismantling production facilities and remediating
            damage caused by the use or release of specified substances. The Board
            of
            Directors reviews the environment policy and compliance with overall
            laws and
            regulations. Monitoring and reporting programs for environment, health
            and
            safety performance in day-to-day operations, as well as inspections and
            assessments, are designed to provide assurance that environmental and
            regulatory
            standards are met. Contingency plans are in place for a timely response
            to an
            environmental event and remediation/reclamation programs are in place
            and
            utilized to restore the environment.
 
 Enterra
            expects to incur abandonment and site reclamation costs as existing oil
            and gas
            properties are abandoned and reclaimed. In 2005, expenditures beyond
            normal
            compliance with environmental regulations were not material. Enterra
            does not
            anticipate making material expenditures beyond normal compliance with
            environmental regulations in 2006. Based on our current estimate, the
            total
            anticipated undiscounted future cost of abandonment and reclamation costs
            to be
            incurred over the life of the reserves is estimated at $41.1million.
 
 **Foreign
            Operations**
 
 As
            at
            December 31, 2005, all of Enterra's reserves and all of its production
            were
            located in North America, which limits Enterra's exposure to risks and
            uncertainties in countries considered politically and economically unstable.
            Enterra does not have operations and related assets outside North America.
 
 **Federal
            Government Pronouncements on Income Trusts and Mutual Fund Status**
 
 Throughout
            2004 and much of 2005, the Canadian federal government expressed concerns
            about
            a potential reduction in future tax revenues due to the increased presence
            of
            income trusts in the Canadian economy and the increased ownership of
            income
            trusts and other flow-through entities by non-residents of Canada. The
            Minister
            of Finance indicated in the February 23, 2005 federal budget that further
            consultations would be pursued with stakeholders on taxation issues related
            to
            income trust and other flow-through entities. On September 8, 2005, the
            Department of Finance released a discussion paper on these matters and
            invited
            interested parties to make submissions to the Department of Finance.
            On November
            23, 2005 the Minister of Finance issued a news release announcing that
            no change
            would be make to the tax treatment of income trusts in Canada and calling
            an end
            to the consultation process initiated in September 2005. In the January
            2006
            federal election, the federal minority Liberal government was replaced
            by a
            minority Conservative government. Both the Liberal and Conservative parties
            have
            stated that they do not intend to change the current tax treatment of
            income
            trusts. In connection with the November 23, 2005 announcement, the former
            Liberal government also announced a reduction in the personal tax rate
            on
            corporate dividends received by Canadians in order to "level the playing
            field"
            between corporations and income trusts. The new Conservative government
            has not
            made any statement in respect of the proposed personal tax rate reduction.
 
 Enterra
            believes the November 23, 2005 announcement should help to remove some
            of the
            uncertainty surrounding the taxation of the income trust sector. However,
            the
            Trust continues to rely on an exception contained in the Tax Act in order
            to
            ensure that it maintains its "mutual fund trust" status under the Tax
            Act.
            Absent such exception, the high percentage of Trust Unit ownership by
            non-residents of Canada (approximately 84% in February 2006) may cause
            the Trust
            to be considered to be "established or maintained primarily for the benefit
            of
            non-residents of Canada", and as a result the Trust would lose its mutual
            fund
            status. See "Risk Factors"
  **Risk
            Factors**
  Set
            out
            below is risk factors that could materially adversely affect our cash
            flow,
            operating results, financial condition or the business of our Operating
            Subsidiaries. Investors should carefully consider these risk factors
            before
            making investment decisions involving our Trust Units.
  **Our
            results of operations and financial condition are dependent on the prices
            received for our oil and natural gas production.**
  Oil
            and
            natural gas prices have fluctuated widely during recent years and are
            subject to
            fluctuations in response to relatively minor changes in supply, demand,
            market
            uncertainty and other factors that are beyond our control. These factors
            include, but are not limited to, worldwide political instability, foreign
            supply
            of oil and natural gas, the level of consumer product demand, government
            regulations and taxes, the price and availability of alternative fuels
            and the
            overall economic environment. Any decline in crude oil or natural gas
            prices may
            have a material adverse effect on our operations, financial condition,
            borrowing
            ability, reserves and the level of expenditures for the development of
            oil and
            natural gas reserves. Any resulting decline in our cash flow could reduce
            distributions.
  -47-
  We
            use
            financial derivative instruments and other hedging mechanisms to try
            to limit a
            portion of the adverse effects resulting from changes in natural gas
            and oil
            commodity prices. To the extent we hedge our commodity price exposure,
            we forego
            the benefits we would otherwise experience if commodity prices were to
            increase.
            In addition, our commodity hedging activities could expose us to losses.
            Such
            losses could occur under various circumstances, including where the other
            party
            to a hedge does not perform its obligations under the hedge agreement,
            the hedge
            is imperfect or our hedging policies and procedures are not followed.
            Furthermore, we cannot guarantee that such hedging transactions will
            fully
            offset the risks of changes in commodities prices.
  In
            addition, we regularly assess the carrying value of our assets in accordance
            with Canadian generally accepted accounting principles under the full
            cost
            method. If oil and natural gas prices become depressed or decline, the
            carrying
            value of our assets could be subject to downward revision.
  **An
            increase in operating costs or a decline in our production level could
            have a
            material adverse effect on our results of operations and financial condition.**
  Higher
            operating costs for our underlying properties will directly decrease
            the amount
            of cash flow received by Enterra and, therefore, may reduce distributions
            to our
            Unitholders. Electricity, chemicals, supplies, reclamation and abandonment
            and
            labour costs are a few of the operating costs that are susceptible to
            material
            fluctuation.
  The
            level
            of production from our existing properties may decline at rates greater
            than
            anticipated due to unforeseen circumstances, many of which are beyond
            our
            control. A significant decline in our production could result in materially
            lower revenues and cash flow and, therefore, could reduce the amount
            available
            for distributions to Unitholders.
  **Distributions
            of the Trust may be reduced during periods in which we make capital expenditures
            or debt repayments using cash flow.**
  To
            the
            extent that we use cash flow from our Operating Subsidiaries to finance
            acquisitions, development costs and other significant expenditures, the
            net cash
            flow that the Trust receives that is available for distribution to Unitholders
            will be reduced. Hence, the timing and amount of capital expenditures
            may affect
            the amount of net cash flow received by the Trust and, as a consequence,
            the
            amount of cash available to distribute to Unitholders. Therefore, distributions
            may be reduced, or even eliminated, at times when significant capital
            or other
            expenditures are made.
  The
            Board
            of Directors has the discretion to determine the extent to which cash
            flow from
            the Trust's will be allocated to the payment of debt service charges
            as well as
            the repayment of outstanding debt, including under credit facilities.
            Funds used
            for such purposes will not be payable to the Trust. As a consequence,
            the amount
            of funds retained by Enterra to pay debt service charges or reduce debt
            will
            reduce the amount of cash available for distribution to Unitholders during
            those
            periods in which funds are so retained.
  The
            retention of cash flow in the Operating Subsidiaries to finance capital
            expenditures or debt repayments may result in current income taxes being
            incurred by such Canadian Operating Subsidiaries and/or increased income
            taxes
            payable by such U.S. Operating Subsidiaries. Payment of cash income taxes
            may in
            turn reduce the cash distribution made by the Trust to the Unitholders.
  The
            return on an investment in the Trust is not comparable to the return
            on an
            investment in a fixed income security. The recovery of an initial investment
            in
            the Trust is at risk, and the anticipated return on such investment is
            based on
            many performance assumptions. Although the Trust intends to make distributions
            of its available cash to Unitholders, these cash distributions may be
            reduced or
            suspended. Cash distributions are not guaranteed. The actual amount distributed
            will depend on numerous factors including: the financial performance
            of the
            Operating Subsidiaries, debt obligations, commodity prices, production
            levels,
            working capital requirements, future capital requirements, applicable
            law and
            other factors beyond the control of the Trust. In addition, the market
            value of
            the Trust Units of may decline if the Trust's cash distributions decline
            in the
            future, and that decline may be material.
  **Trust
            distributions are affected by marketability of production.**
  Our
            business depends in part upon the availability, proximity and capacity
            of gas
            gathering systems, pipelines and processing facilities. Canadian federal
            and
            provincial, as well as United States federal and state, regulation of
            oil and
            gas production, processing and transportation, tax and energy policies,
            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
            change and
            inhibit the marketing of our production, overall production or realized
            prices
            may decline, which could reduce distributions to our Unitholders.
  -48-
  **Fluctuations
            in foreign currency exchange rates could adversely affect our
            business.**
  The
            price
            that we receive for a majority of our oil and natural gas is based on
            United
            States dollar denominated benchmarks, and therefore the price that we
            receive in
            Canadian dollars is affected by the exchange rate between the two currencies.
            A
            material increase in the value of the Canadian dollar relative to the
            United
            States dollar may negatively impact net production revenue by decreasing
            the
            Canadian dollars received for a given United States dollar price. We
            could be
            subject to unfavourable price changes to the extent that we have engaged,
            or in
            the future engage, in risk management activities related to foreign exchange
            rates, through entry into forward foreign exchange contracts or
            otherwise.
  **Ability
            to replenish reserves affects our distributions.**
  We
            do not
            actively explore for oil and natural gas reserves. Instead, we add to
            our oil
            and natural gas reserves primarily through development, exploitation
            and
            acquisitions. As a result, future oil and natural gas reserves are highly
            dependent on our success in exploiting existing properties and acquiring
            additional reserves. We also distribute the majority of our net cash
            flow to
            Unitholders rather than reinvesting it in reserve additions. Accordingly,
            if
            external sources of capital, including the issuance of additional Trust
            Units,
            become limited or unavailable on commercially reasonable terms, our ability
            to
            make the necessary capital investments to maintain or expand our oil
            and natural
            gas reserves will be impaired. To the extent that we are required to
            use cash
            flow to finance capital expenditures or property acquisitions, the level
            of cash
            flow available for distribution to Unitholders will be reduced. Additionally,
            we
            cannot guarantee that we will be successful in developing additional
            reserves or
            acquiring additional reserves on terms that meet our investment objectives.
            Without these reserve additions, our reserves will deplete and as a consequence,
            either production from, or the average reserve life of, our properties
            will
            decline. Either decline may result in a reduction in the value of our
            Trust
            Units and in a reduction in cash available for distributions to
            Unitholders.
  **Actual
            reserves will vary from reserve estimates.**
  The
            value
            of our Trust Units depends upon, among other things, the reserves attributable
            to our properties. Estimating reserves is inherently uncertain. Ultimately,
            actual reserves attributable to our properties will vary from estimates,
            and
            those variations may be material. The reserve figures contained herein
            are only
            estimates. A number of factors are considered and a number of assumptions
            are
            made when estimating reserves. These factors and assumptions include,
            among
            others:
  ·  historical
            production in the area compared with production rates from similar producing
            areas;
 ·  future
            commodity prices, production and development costs, royalties and capital
            expenditures;
 ·  initial
            production rates;
 ·  production
            decline rates;
 ·  ultimate
            recovery of reserves;
 ·  success
            of future development activities;
 ·  marketability
            of production;
 ·  effects
            of government regulation; and
 ·  other
            government levies that may be imposed over the producing life of
            reserves.
 
 Reserve
            estimates are based on the relevant factors, assumptions and prices on
            the date
            the relevant evaluations were prepared. Many of these factors are subject
            to
            change and are beyond our control. If these factors, assumptions and
            prices
            prove to be inaccurate, actual results may vary materially from reserve
            estimates.
  **Incorrect
            assessments of value at the time of the acquisition could adversely affect
            the
            market price of our Trust Units and our distributions.**
  The
            price
            we are willing to pay for reserve acquisitions is based largely on estimates
            of
            the reserves to be acquired. Actual reserves could vary materially from
            these
            estimates. Consequently, the reserves we acquire may be less than expected,
            which could adversely impact cash flows and distributions to Unitholders.
            An
            initial assessment of an acquisition may be based on a report by engineers
            or
            firms of engineers that have different evaluation methods and approaches
            than
            those of our engineers, and these initial assessments may differ significantly
            from our subsequent assessments.
  **We
            may undertake acquisitions that could limit our ability to manage and
            maintain
            our business result in adverse accounting treatment and are difficult
            to
            integrate into our business. Any of these events could result in a material
            change in our liquidity, impair our ability to pay dividends and could
            adversely
            affect the value of your investment.**
  A
            component of future growth will depend on the ability to identify, negotiate,
            and acquire additional companies and assets that complement or expand
            existing
            operations. However we may be unable to complete any acquisitions, or
            any
            acquisitions we may complete may not enhance our business. Any acquisitions
            could subject us to a number of risks, including:
  -49-
  ·
                  diversion
                      of management's attention;
 ·
                  inability
                      to retain the management, key personnel and other employees
                      of the
                      acquired business;
 ·
                  inability
                      to establish uniform standards, controls, procedures and
                      policies;
 ·
                  inability
                      to retain the acquired company's
                      customers;
 ·
                  exposure
                      to legal claims for activities of the acquired business prior
                      to
                      acquisition; and inability to integrate the acquired company
                      and its
                      employees into our organization
                      effectively.
  **The
            operation of a portion of our properties is dependent on third-party
            operators,
            and harm to their business could adversely affect our revenues and ultimately
            our distributions.**
  The
            continuing production from a property, and to some extent the marketing
            of that
            production, is dependent upon the ability of the operators of those properties.
            At December 31, 2005, approximately 14% **** of
            our
            daily production was from properties operated by third parties. To the
            extent a
            third-party operator fails to perform its functions efficiently or becomes
            insolvent, our revenue may be reduced. Third party operators also make
            estimates
            of future capital expenditures more difficult.
  Further,
            the operating agreements, which govern the properties not operated by
            us
            typically, require the operator to conduct operations in a good and
            "workmanlike" manner. These operating agreements generally provide, however,
            that the operator has no liability to the other non-operating working
            interest
            owners for losses sustained or liabilities incurred, except for liabilities
            that
            may result from gross negligence or willful misconduct.
  **Delays
            in business operations could adversely affect our
            distributions.**
  In
            addition to the usual delays in payment by purchasers of oil and natural
            gas to
            the operators of our properties, and the delays of those operators in
            remitting
            payment to us, payments between any of these parties may also be delayed
            by:
  ·  restrictions
            imposed by lenders;
 ·  accounting
            delays;
 ·  delays
            in
            the sale or delivery of products;
 ·  delays
            in
            the connection of wells to a gathering system;
 ·  blowouts
            or other accidents;
 ·  adjustments
            for prior periods;
 ·  recovery
            by the operator of expenses incurred in the operation of the properties;
            or
 ·  the
            establishment by the operator of reserves for these expenses.
 
 Any
            of
            these delays could reduce the amount of cash available for distribution
            to
            Unitholders in a given period and expose us to additional third party
            credit
            risks.
  **Our
            debt level could have a material adverse effect on our ability to pay
            distributions to our Unitholders.**
  The
            payment of interest and principal, and other costs, expenses and disbursements
            to our lenders reduces the amounts available for distribution to Unitholders.
            Variations in interest rates and scheduled principal repayments could
            result in
            significant changes to the amount of the cash flow required to be applied
            to the
            debt before payment of any amounts to the Unitholders. The agreements
            governing
            our credit facilities provide that if we are in default under the credit
            facilities, exceed certain borrowing thresholds or fail to comply with
            certain
            covenants, we must repay the indebtedness at an accelerated rate, and
            the
            ability to make distributions to Unitholders may be restricted.
  Our
            lenders have been provided with a security interest in substantially
            all of our
            assets. If we are unable to pay the debt service charges or otherwise
            commit an
            event of default, such as bankruptcy, our lenders may foreclose on and
            sell the
            properties. The proceeds of any sale would be applied to satisfy amounts
            owed to
            the lenders and our other creditors. Only after the proceeds of that
            sale were
            applied towards all debts would the remainder, if any, be available for
            distribution to Unitholders.
  -50-
  **Our
            current credit facilities and any replacement credit facilities may not
            provide
            sufficient liquidity.**
  In
            March
            2006, the Trust closed a $110.0 million senior secured bridge facility.
            This
            non-revolving credit facility was be used to payout the existing $100.0
            million
            credit facilities of the Trust. The facility bears interest at 2.5% above
            bank
            prime lending rates and matures on December 31, 2006. The facility is
            secured by
            a first charge over all Canadian assets of the Trust and a second charge
            over
            all US assets.
  In
            March
            2006 the Trust closed a USD $200.0 million senior secured bridge credit
            facility. This non-revolving facility bears interest at 4.5% above London
            Interbank Offering Rate and matures September 20, 2006 with a one-time
            option to
            extend the facility for an additional three-month period. The facility
            is
            secured by a first charge over all US assets of the Trust and a second
            charge
            over all Canadian assets. The terms of the agreement restrict the Trust’s
            ability to distribute cash flow from the U.S. cost center to USD $1.5
            million
            per month.
  The
            Trust
            does not expect to repay the two bridge facilities from internally generated
            cash and will need to seek additional financing through the issuance
            of debt or
            equity.
  **Our
            assets are highly leveraged. Any material change in our liquidity could
            impair
            our ability to pay dividends and could adversely affect the value of
            your
            investment.**
  We
            carry
            a high amount of debt relative to our assets. A decrease in the amount
            of our
            production or the price we receive for it could make it difficult for
            us to
            service our debt or may cause our lenders to determine that our assets
            are
            insufficient security for our debts.
  **Changes
            in market-based factors may adversely affect the trading price of our
            Trust
            Units.**
  The
            market price of our Trust Units is primarily a function of anticipated
            distributions to Unitholders and the value of our properties. The market
            price
            of our Trust Units is therefore sensitive to a variety of market-based
            factors,
            including, but not limited to, interest rates and the comparability of
            our Trust
            Units to other yield oriented securities. Any changes in these market-based
            factors may adversely affect the trading price of the Trust Units.
  **Our
            operations are entirely independent from the Unitholders and loss of
            key
            management and other personnel could impact our business.**
  Unitholders
            are entirely dependent on the management of Enterra 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 our oil and natural gas properties and the administration
            of
            the Trust. The loss of the services of key individuals who currently
            comprise
            the management team could have a detrimental effect on the Trust. Investors
            should carefully consider whether they are willing to rely on the existing
            management before investing in the Trust Units.
  **The
            oil and natural gas industry is highly competitive.**
  We
            compete for capital, acquisitions of reserves, undeveloped lands, skilled
            personnel, access to drilling rigs, service rigs and other equipment,
            access to
            processing facilities, pipeline and refining capacity and in many other
            respects
            with a substantial number of other organizations, many of which may have
            greater
            technical and financial resources than we do. Some of these organizations
            explore for, develop and produce oil and natural gas and carry on refining
            operations and market oil and other products on a worldwide basis. As
            a result
            of these complementary activities, some of our competitors may have greater
            and
            more diverse competitive resources to draw on than we do. Given the highly
            competitive nature of the oil and natural gas industry, this could adversely
            affect the market price of our Trust Units and distributions to
            Unitholders.
  **The
            industry in which we operate exposes us to potential liabilities that
            may not be
            covered by insurance.**
  Our
            operations are subject to all of the risks associated with the operation
            and
            development of oil and natural gas properties, including the drilling
            of oil and
            natural gas wells, and the production and transportation of oil and natural
            gas.
            These risks include encountering unexpected formations or pressures,
            premature
            declines of reservoirs, blow-outs, equipment failures and other accidents,
            cratering, sour gas releases, uncontrollable flows of oil, natural gas
            or well
            fluids, adverse weather conditions, pollution, other environmental risks,
            fires
            and spills. A number of these risks could result in personal injury,
            loss of
            life, or environmental and other damage to our property or the property
            of
            others. We cannot fully protect against all of these risks, nor are all
            of these
            risks insurable. We may become liable for damages arising from these
            events
            against which we cannot insure or against which we may elect not to insure
            because of high premium costs or other reasons. Any costs incurred to
            repair
            these damages or pay these liabilities would reduce funds available for
            distribution to Unitholders.
  -51-
  **We
            may incur material costs to comply with or as a result of health, safety,
            and
            environmental laws and regulations.**
  The
            oil
            and natural gas industry is subject to extensive environmental regulation
            pursuant to local, provincial and federal legislation. A breach of that
            legislation may result in the imposition of fines or the issuance of
            "clean up"
            orders. Legislation regulating the oil and natural gas industry may be
            changed
            to impose higher standards and potentially more costly obligations. For
            example,
            the 1997 Kyoto Protocol to the United Nation's Framework Convention on
            Climate
            Change, known as the Kyoto Protocol, was ratified by the Canadian government
            in
            December 2002 and will require, among other things, significant reductions
            in
            greenhouse gases. The impact of the Kyoto Protocol on us is uncertain
            and may
            result in significant additional costs (future) for our operations. Although
            we
            record a provision in our financial statements relating to our estimated
            future
            environmental and reclamation obligations, we cannot guarantee that we
            will be
            able to satisfy our actual future environmental and reclamation
            obligations.
  We
            are
            not fully insured against certain environmental risks, either because
            such
            insurance is not available or because of high premium costs. In particular,
            insurance against risks from environmental pollution occurring over time
            (as
            opposed to sudden and catastrophic damages) is not available on economically
            reasonable terms.
  Accordingly,
            our properties may be subject to liability due to hazards that cannot
            be insured
            against, or that have not been insured against due to prohibitive premium
            costs
            or for other reasons. Any site reclamation or abandonment costs actually
            incurred in the ordinary course of business in a specific period will
            be funded
            out of cash flow and, therefore, will reduce the amounts available for
            distribution to Unitholders. Should we be unable to fully fund the cost
            of
            remedying an environmental problem, we might be required to suspend operations
            or enter into interim compliance measures pending completion of the required
            remedy.
  **Lower
            oil and gas prices increase the risk of impairment of our oil and gas
            property
            investments.**
  All
            costs
            related to the exploration for and the development of oil and gas reserves
            are
            capitalized into one of two cost centers, Canada and the United States.
            Costs
            capitalized include land acquisition costs, geological and geophysical
            expenditures, lease rentals on undeveloped properties and costs of drilling
            productive and non-productive wells and production equipment. General
            and administrative costs are capitalized if they are directly related
            to
            development or exploration projects. Proceeds from the disposal of oil
            and
            natural gas properties are applied as a reduction of cost without recognition
            of
            a gain or loss except where such disposals would result in a 20% change
            in the
            depletion rate.
  Capitalized
            costs are depleted and depreciated using the unit-of-production method
            based on
            the estimated gross proven oil and natural gas reserves before royalties
            as
            determined by independent engineers. Units of natural gas are converted
            into
            barrels of equivalents on a relative energy content basis. The
            amounts recorded for depletion, depreciation and the asset retirement
            obligation
            are based on estimates. The ceiling test calculation is based on estimates
            of
            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.
  The
            Trust
            places a limit on the carrying value of property and equipment, which
            may be
            depleted against revenues of future periods (the "ceiling test"). The
            ceiling
            test is conducted separately for each cost center, Canada and the United
            States.
            The carrying value is assessed to be recoverable when the sum of the
            undiscounted cash flows expected from the production of proved reserves,
            the
            lower of cost and market of unproved properties and the cost of major
            development projects exceeds the carrying value of the cost center. When
            the
            carrying value is not assessed to be recoverable, an impairment loss
            is
            recognized to the extent that the carrying value of petroleum and natural
            gas
            properties exceeds the sum of the discounted cash flows expected from
            the
            production of proved and probable reserves, the lower of cost and market
            of
            unproved properties and the cost of major development projects. The cash
            flows
            are estimated using expected future product prices and costs and are
            discounted
            using a risk-free interest rate. The carrying value of property and equipment
            subject to the ceiling test includes asset retirement costs. By their
            nature,
            these estimates are subject to measurement uncertainty and may impact
            the
            consolidated financial statements of future periods.
  In
            2005 a
            provision of $13.8 million is included within depletion, depreciation
            and
            accretion expense due to a ceiling test write down in the United States
            cost
            center. The provision was required due to the expiration of certain undeveloped
            lands in RMG, which increased the cost base that the test is calculated
            on and a
            reduction of the reserves in the December 31, 2005 reserve report due
            to the
            results from the properties during 2005. The risk that we will be required
            to
            write down the carrying value of crude oil and natural gas properties
            increases
            when crude oil and natural gas prices are low or volatile.
  **Unforeseen
            title defects may result in a loss of entitlement to production and
            reserves.**
  Although
            we conduct title reviews in accordance with industry practice prior to
            any
            purchase of resource assets, such reviews do not guarantee that an unforeseen
            defect in the chain of title will not arise and defeat our title to the
            purchased assets. If such a defect were to occur, our entitlement to
            the
            production from such purchased assets could be jeopardized and, as a
            result,
            distributions to Unitholders may be reduced.
  -52-
  **Aboriginal
            land claims**
  The
            economic impact on us of claims of aboriginal title is unknown. Aboriginal
            people have claimed aboriginal title and rights to a substantial portion
            of
            western Canada. We are unable to assess the effect, if any, that any
            such claim
            would have on our business and operations.
  **Changes
            in tax and other legislation may adversely affect
            Unitholders.**
  Income
            tax laws, other legislation or government incentive programs relating
            to the oil
            and gas industry, such as the treatment of mutual fund trusts and resource
            allowance, may in the future be changed or interpreted in a manner that
            adversely affects the Trust and the Unitholders. Tax authorities having
            jurisdiction over the Trust or the Unitholders may disagree with the
            manner in
            which we calculate our income for tax purposes or could change their
            administrative practices to our detriment or the detriment of the Unitholders.
  In
            particular, generally speaking, the Tax Act provides that a trust will
            permanently lose its "mutual fund trust" status (which is essential to
            the
            income trust structure) if it is established or maintained primarily
            for the
            benefit of non-residents of Canada (which is generally interpreted to
            mean that
            the majority of Unitholders must not be non-residents of Canada), unless
            at all
            times after February 21,1990, "all or substantially all" of the trust's
            property
            consisted of property other than taxable Canadian property (the "TCP
            Exception"). Based on the most recent information obtained by Enterra
            through
            its transfer agent and financial intermediaries, in February 2006 an
            estimated
            84% of Enterra's issued and outstanding Trust Units were held by non-residents
            of Canada (as defined in the Tax Act) at that time. The Trust is currently
            able
            to take advantage of the TCP Exception, and as a result, the Trust does
            not
            currently have a specific limit on the percentage of Trust Units that
            may be
            owned by non-residents.
  On
            March
            23, 2004, the Canadian federal government announced proposed changes
            to the Tax
            Act, which would have effectively eliminated, over a period of time,
            the TCP
            Exception currently relied on by Enterra to maintain its mutual fund
            trust
            status. However, as the proposed changes only affected mutual fund trusts
            that
            held contractual oil and gas royalties, the proposals would not have
            had a
            direct impact on Enterra. In response to submissions from and discussions
            with
            stakeholders, the Canadian federal government suspended the implementation
            of
            those proposed amendments. The Minister of Finance indicated in the February
            23,
            2005 federal budget that further consultations would be pursued with
            stakeholders on taxation issues related to income trust and other flow-through
            entities. On September 8, 2005, the Department of Finance released a
            discussion
            paper on these matters and invited interested parties to make submissions
            to the
            Department of Finance. On November 23, 2005, the Minister of Finance
            released a
            news release announcing that no change would be made to the tax treatment
            of
            income trusts in Canada and calling an end to the consultation process
            initiated
            in September 2005.
  Notwithstanding
            the above, there is no assurance that Canadian federal government will
            not
            introduce new changes or proposals to tax regulations directed at non-resident
            ownership which, given the Trust's level of non-resident ownership, may
            result
            in the Trust losing its mutual fund trust status or could otherwise
            detrimentally affect Enterra and the market price of the Trust Units.
            Enterra
            intends to continue to take the necessary measures in order to ensure
            the Trust
            continues to qualify as a mutual fund trust under the Tax Act. There
            would be
            material adverse consequences if the Trust lost its status as a mutual
            fund
            trust under Canadian tax laws.
  Enterra
            may not be able to take steps necessary to ensure that the Trust maintains
            its
            mutual fund trust status. Even if the Trust is successful in taking such
            measures, these measures could be adverse to certain holders of Trust
            Units,
            particularly "non-residents" of Canada (as defined in the Tax Act). The
            Board of
            Directors could impose a specific limit on the number of Trust Units
            that could
            be beneficially owned by non-residents of Canada, similar to the non-resident
            ownership restrictions in place for other income funds and royalty trusts
            in
            Canada, or could implement a dual-class unit structure which would effectively
            limit the aggregate number of Trust Units that could be owned by non-residents
            of Canada. Steps could be taken to ensure that no additional Trust Units
            are
            issued or transferred to non-residents, including limiting and suspending
            the
            trading of the Trust Units.
  **There
            would be material adverse tax consequences if the Trust lost its status
            as a
            mutual fund trust under Canadian tax laws.**
  It
            is
            intended that Enterra continue to qualify as a mutual fund trust for
            purposes of
            the Tax Act. The Trust may not, however, always be able to satisfy any
            future
            requirements for the maintenance of mutual fund trust status. Should
            the status
            of the Trust as a mutual fund trust be lost or successfully challenged
            by a
            relevant tax authority, certain adverse consequences may arise for the
            Trust and
            Unitholders. Some of the significant consequences of losing mutual fund
            trust
            status are as follows:
  -53-
  ·
                  The
                      Trust would be taxed on certain types of income distributed
                      to
                      Unitholders. Payment of this tax may have adverse consequences
                      for some
                      Unitholders, particularly Unitholders that are not residents
                      of Canada and
                      residents of Canada that are otherwise exempt from Canadian
                      income
                      tax.
  ·
                  The
                      Trust would cease to be eligible for the capital gains refund
                      mechanism
                      available under Canadian tax laws.
  ·
                  Trust
                      Units held by Unitholders that are non-residents of Canada
                      would become
                      taxable Canadian property. These non-resident holders would
                      be subject to
                      Canadian income tax on any gains realized on a disposition
                      of Trust Units
                      held by them.
  ·
                  The
                      Trust Units may not constitute qualified investments for Registered
                      Retirement Savings Plans ("RRSPs"), Registered Retirement Income
                      Funds
                      ("RRIFs"), Registered Education Savings Plans ("RESPs"), or
                      Deferred
                      Profit Sharing Plans ("DPSPs"). If, at the end of any month,
                      one of these
                      exempt plans holds Trust Units that are not qualified investments,
                      the
                      plan must pay a tax equal to 1% of the fair market value of
                      the Trust
                      Units at the time the Trust Units were acquired by the exempt
                      plan. An
                      RRSP or RRIF holding non-qualified Trust Units would be subject
                      to
                      taxation on income attributable to the Trust Units. If an RESP
                      holds
                      non-qualified Trust Units, it may have its registration revoked
                      by the
                      Canada Revenue Agency.
  **Taxation
            of the Operating Subsidiaries**
  Enterra
            is subject to taxation in each taxation year on its taxable income for
            the year,
            after deducting interest paid to the Trust in respect of the Series Notes.
            During the period that Exchangeable Shares are outstanding, a portion
            of the
            cash flow from operations will be subject to tax to the extent that there
            are
            not sufficient resource pool deductions, capital cost allowance or utilization
            of prior years non-capital losses to reduce taxable income to zero. The
            Operating Subsidiaries intend to deduct, in computing their income for
            tax
            purposes, the full amount available for deduction in each year associated
            with
            their income tax resource pools, undepreciated capital cost ("UCC") and
            non-capital losses, if any. If there are not sufficient resource pools,
            UCC,
            non-capital losses carried forward, and interest to shelter the income
            of the
            Operating Subsidiaries, then cash taxes would be payable. In addition,
            there can
            be no assurance that taxation authorities will not seek to challenge
            the amount
            of interest expense relating to the Series Notes. If such a challenge
            were to
            succeed against us, it could materially adversely affect the amount of
            cash flow
            available for distribution to Unitholders.
  Further,
            interest on the Series Notes accrues at the Trust level for income tax
            purposes
            whether or not actually paid. The Trust Indenture provides that an amount
            equal
            to the taxable income of the Trust will be distributed each year to Unitholders
            in order to reduce the Trust's taxable income to zero. Where interest
            payments
            on the Enterra Debt are due but not paid in whole or in part, the Trust
            Indenture provides that any additional amount necessary to be distributed
            to
            Unitholders may be distributed in the form of Trust Units rather than
            in cash.
            Unitholders will be required to include such an amount equal to the fair
            market
            value of Trust Units in income even though they do not receive a cash
            distribution.
  The
            Trust
            Indenture provides that an amount equal to the taxable income of the
            Trust will
            be payable each year to Unitholders in order to reduce the Trust's taxable
            income to zero. Where in a particular year, the Trust does not have sufficient
            available cash to distribute such an amount to the Unitholders; the Trust
            Indenture provides that additional Trust Units must be distributed to
            Unitholders in lieu of cash payments. Unitholders will generally be required
            to
            include an amount equal to the fair market value of those Trust Units
            in their
            taxable income, notwithstanding that they do not directly receive a cash
            payment.
  **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. ******
  -54-
  **United
            States Unitholders may be limited in their ability to use the Canadian
            withholding tax as a credit against United States federal income tax
            and in
            their ability to claim the effect of certain other favourable United
            States
            income tax provisions.**
  The
            Trust
            expects that it will be classified for United States federal income tax
            purposes
            as a partnership and not as a corporation. As a result, a citizen of
            the United
            States and each other person who is subject to United States federal
            income tax
            on a net income basis with respect to the Trust Units (each such person
            is
            referred to herein as a U.S. Unitholder) will include its share of the
            income,
            gain, loss, deduction and credit of the Trust on its United States federal
            income tax return in determining its liability for the United States
            federal
            income tax.
  The
            Canadian income taxes that are withheld (currently at a 15 percent rate)
            from a
            distribution to a U.S. Unitholder on a Trust Unit may be deducted or,
            subject to
            limitations, used as a credit for United States federal income tax purposes.
            Such limitations include the effect of the allocation of certain interest
            expense to such foreign source income and the limitation that such a
            U.S.
            Unitholder may claim any such Canadian withholding tax in respect of
            a
            distribution by a corporation as a foreign tax credit only if such person
            held
            the corporation's stock for a period (subject to certain tolling rules
            that
            apply if certain risk reduction strategies are employed) of at least
            16 days
            during the 31 day period beginning on the date which is 15 days before
            the date
            on which the stock went ex-dividend with respect to such dividend without
            being
            under an obligation to make related payments with respect to substantially
            similar or related property. The Trust expects the Internal Revenue Service
            to
            take the position that such holding period requirement applies to the
            U.S.
            Unitholder's holding period in the Trust Units.
  For
            a
            U.S. Unitholder who is an individual, its share of the Trust's dividend
            income
            from a Canadian corporation is subject to United States federal income
            tax at a
            maximum rate of 15 percent provided that (i) the shares in respect of
            which the
            dividends are paid have been held (subject to certain tolling rules that
            apply
            if certain risk reduction strategies are employed) for more than 60 days
            during
            the 121 day period which begins 60 days before those shares go ex-dividend
            and
            (ii) the payor of the dividend is not a passive foreign investment company.
            The
            Trust expects the Internal Revenue Service to assert that such holding
            period
            requirement applies not only to the Trust's holding period in the corporation
            that pays the dividend but also to an individual's holding period in
            the Trust
            Units. The required holding period is longer than 60 days in respect
            of payments
            on any preferred shares that the Trust owns if any dividend payment thereon
            is
            identified to a period in excess of 366 days.
  Each
            such
            U.S. Unitholder should discuss the effect of the limitations on the use
            of such
            Canadian taxes as a credit (including the effect of any ability to obtain
            a
            refund of such Canadian withholding tax in certain circumstances) and
            the
            limitations on obtaining certain other favourable United States income
            tax
            provisions with its own advisers.
  **United
            States Unitholders who are generally tax exempt under United States law
            may
            recognize unrelated business taxable income (which is subject to United
            States
            federal income tax) in respect of their Trust Units.**
  Individual
            retirement accounts, other employee benefit plans and certain organizations
            that
            are generally exempt from United States federal income tax are subject
            to United
            States federal income tax on unrelated business taxable income, such
            as certain
            income from debt financed property, to the extent that such unrelated
            business
            taxable income for a taxable year is in excess of $1,000. The Trust has
            in the
            past and may in the further incur debt the proceeds of which are invested
            in
            stock of EEC or of another corporation. In that event, the dividends
            that the
            Trust receives from such corporation (which flow through to the holders
            of Trust
            Units so long as the Trust is a partnership for United States federal
            income tax
            purposes as it expects to provide any guidance in advance as to the amount
            of
            our income that will be unrelated business taxable income.
  Such
            an
            individual retirement account or other tax exempt organization will also
            be
            subject to the Canadian withholding tax on distributions that the Trust
            makes
            and will as a general matter be able to use all or a portion of that
            Canadian
            withholding tax as a credit against the United States federal income
            tax for
            which it is liable on any unrelated business taxable income in accordance
            with
            applicable law and with due regard to the applicable restrictions thereon.
            Such
            Canadian income tax will not as a general matter reduce or otherwise
            affect the
            Untied States federal income taxation of distributions that an individual
            retirement account or other employee benefit plans makes to its beneficiary
            or
            beneficiaries.
  **United
            States Unitholders may be subject to passive foreign investment company
            rules.**
  Although
            the Trust does not expect that any of its subsidiaries that are corporations
            for
            United States federal income tax purposes (or the Trust if it were to
            be a
            corporation for such purposes) is or has been a passive foreign investment
            company, or PFIC, there is no assurance in that regard. A foreign corporation
            is, as a general matter, a PFIC if either (a) 75 percent or more of its
            gross
            income in a taxable year, including the pro rata share of the gross income
            of
            certain partially owned (whether directly or indirectly) corporations,
            is
            passive income (as defined in the pertinent provisions of the Internal
            Revenue
            Code) or (b) 50 percent or more of its assets (including the pro rata
            share of
            the assets of any such partially owned subsidiary) are held for the production
            of, or to produce, passive income. If the Trust or any of its subsidiaries
            were
            a PFIC, then a U.S. Unitholders who did not make an election to treat
            such
            corporation as a qualified electing fund (there is no assurance that
            it will be
            able to make such an election) would not only pay United States federal
            income
            tax in respect of (a) distributions on the stock thereof (even if such
            U.S.
            Unitholder did not own stock in the PFIC directly) and (b) on any gain
            that is
            realized upon the sale of the stock of such corporation (even if the
            cash
            proceeds thereof were not received) but would also pay an additional
            income tax
            on any excess distribution (that is, the portion of any such distribution
            that
            exceeds 125 percent of the average distributions made thereon in the
            shorter of
            the three previous taxable years or such person's holding period before
            the
            taxable year of the distribution) and gain that approximates (and in
            some cases
            exceeds) the value of the presumed benefit of the deferral of United
            States
            federal income taxation that would be available to a foreign corporation
            that is
            not a PFIC. Moreover, an individual who is a U.S. Unitholder would not
            be
            entitled to the 15 percent maximum rate of Untied States federal income
            tax on
            any dividend that is received in respect of the stock in any such PFIC.
  -55-
  U.S.
            Unitholders are urged to consult their own tax advisors regarding the
            United
            States federal income tax consequences of classification as a PFIC of
            any
            corporation in which the Trust owns an interest (or the Trust) and of
            the
            consequences of such classification.
  **United
            States and other non-resident Unitholders may be subject to additional
            taxation.**
  The
            Tax
            Act and the tax treaties between Canada and other countries may impose
            additional withholding or other taxes on the cash distributions or other
            property paid by the Trust to Unitholders who are not residents of Canada,
            and
            these taxes may change from time to time. For instance, since January
            1, 2005, a
            15 percent withholding tax is applied to return of capital portion of
            distributions made to non-resident Unitholders.
  **The
            ability of United States and other non-resident investors to enforce
            civil
            remedies may be limited.**
  The
            Trust
            is a trust organized under the laws of Alberta, Canada, and Enterra's
            principal
            offices are in Canada. Most of the directors and officers of Enterra
            are
            residents of Canada and most of the experts who provide services to Enterra
            (such as its auditors and some of its independent reserve engineers)
            are
            residents of Canada, and all or a substantial portion of their assets
            and the
            assets of the Trust are located within Canada. As a result, it may be
            difficult
            for investors in the United States or other non-Canadian jurisdictions
            (a
            "Foreign Jurisdiction") to effect service of process within such Foreign
            Jurisdiction upon such directors, officers and representatives of experts
            who
            are not residents of the Foreign Jurisdiction or to enforce against them
            judgement of courts of the applicable Foreign Jurisdiction based upon
            civil
            liability under the securities laws of such Foreign Jurisdiction, including
            United States federal securities laws or the securities laws of any state
            within
            the United States. In particular, there is doubt as to the enforceability
            in
            Canada against Enterra or any of its directors, officers or representatives
            of
            experts who are not residents of the Untied States, in original actions
            or in
            actions for enforcement of judgments of United States courts of liabilities
            based solely upon the Untied States federal securities laws or the securities
            laws of any state within the United States.
  **Rights
            as a Unitholder differ from those associated with other types of
            investments.**
  The
            Trust
            Units do not represent a traditional investment in the oil and natural
            gas
            sector and should not be viewed by investors as shares in the Trust or
            the Trust
            Subsidiaries. The Trust Units represent an equal fractional beneficial
            interest
            in the Trust and, as such, the ownership of the Trust Units does not
            provide
            Unitholders with the statutory rights normally associated with ownership
            of
            shares of a corporation, including, for example, the right to bring "oppression"
            or "derivative" actions. The unavailability of these statutory rights
            may also
            reduce the ability of Unitholders to seek legal remedies against other
            parties
            on our behalf.
  The
            Trust
            Units are also unlike conventional debt instruments in that there is
            no
            principal amount owing to Unitholders. The Trust Units will have minimal
            value
            when reserves from our properties can no longer be economically produced
            or
            marketed. Unitholders will only be able to obtain a return of the capital
            they
            invested during the period when reserves may be economically recovered
            and sold.
            Accordingly, cash distributions do not represent a "yield" in the traditional
            sense as they represent both return of capital and return on investment
            and the
            distributions received over the life of the investment may not meet or
            exceed
            the initial capital investment.
  **The
            limited liability of Unitholders of the Trust is
            uncertain.**
  Due
            to
            uncertainties in the law relating to investment trusts, there is a risk
            that a
            Unitholder could be held personally liable for obligations of the Trust
            in
            respect of contracts or undertakings which the Trust enters into and
            for certain
            liabilities arising otherwise than out of contracts including claims
            in tort,
            claims for taxes and possibly certain other statutory liabilities. Although
            every written contract or commitment of the Trust must contain an express
            disavowal of liability of the Unitholders and a limitation of liability
            to Trust
            property, such protective provisions may not operate to avoid unitholder
            liability. Notwithstanding attempts to limit unitholder liability, Unitholders
            may not be protected from liabilities of the Trust to the same extent
            that a
            shareholder is protected from the liabilities of a corporation. Further,
            although the Trust has agreed to indemnify and hold harmless each unitholder
            from any costs, damages, liabilities, expenses, charges and losses suffered
            by
            the unitholder resulting from or arising out of that unitholder not having
            limited liability, the Trust cannot guarantee that any assets would be
            available
            in these circumstances to reimburse unitholders for any such
            liability.
  -56-
  **The
            redemption rights of Unitholders are limited.**
  Unitholders
            have a limited right to require the Trust to repurchase their Trust Units,
            which
            is referred to as a redemption right. It is anticipated that the redemption
            right will not be the primary mechanism for Unitholders to liquidate
            their
            investment. The Trust's ability to pay cash in connection with redemption
            is
            subject to limitations. Any securities, which may be distributed in specie
            to
            Unitholders in connection with a redemption, may not be listed on any
            stock
            exchange and a market may not develop for such securities. In addition,
            there
            may be resale restrictions imposed by law upon the recipients of the
            securities
            pursuant to the redemption right.
  **There
            may be future dilution.**
  One
            of
            our objectives is to continually add to our reserves through acquisitions
            and
            through development. Since we do not reinvest a material portion of our
            cash
            flow, our success is, in part, dependent on our ability to raise capital
            from
            time to time by selling additional Trust Units. Unitholders will suffer
            dilution
            as a result of these offerings if, for example, the cash flow, production
            or
            reserves from the acquired assets do not reflect the additional number
            of Trust
            Units issued to acquire those assets. Unitholders may also suffer dilution
            in
            connection with future issuances of Trust Units to effect
            acquisitions.
  **There
            may not always be an active trading market for the Trust
            Units.**
  While
            there is currently an active trading market for our Trust Units in the
            United
            States and Canada, we cannot guarantee that an active trading market
            will be
            sustained.
  **Distributions
            to Unitholders** ****
  Unitholders
            of record on a distribution record date are entitled to receive distributions,
            which are paid by Enterra to the Unitholders on the corresponding distribution
            payment date. The Trust makes cash distributions on the 15th day of each
            month
            (or the first business day thereafter) to Unitholders of record on the
            immediately preceding distribution record date. Distributions to Unitholders
            that are not residents of Canada will be subject to Canadian withholding
            tax.
  **Distributable
            Income**
  We
            intend
            to make distributions of available cashflow to Unitholders; however,
            these cash
            distributions cannot be assured. The amount available is dependent on
            commodity
            prices, production rates, reserve growth as well as amounts used to finance
            acquisitions, development costs and other significant expenditures, We
            mitigate
            the risk of fluctuations in commodity prices hedging some of our production.
            A
            detailed schedule of our hedging history and current position is set
            forth under
            "Operational Information - Risk Management- Commodity Price Risk". To
            the extent
            that we use cash flow from our Operating Subsidiaries to finance capital
            expenditures, the net cash flow that the Trust receives that is available
            for
            distribution to Unitholders will be reduced. Hence, the timing and amount
            of
            capital expenditures may affect the amount of net cash flow received
            by the
            Trust and, as a consequence, the amount of cash available to distribute
            to
            Unitholders. Therefore, distributions may be reduced, or even eliminated,
            at
            times when significant capital or other expenditures are made. Furthermore,
            the
            level of distributions per Trust Unit will be affected by the number
            of
            outstanding Trust Units.
  The
            after-tax return from an investment in the Trust Units to Unitholders
            subject to
            Canadian income tax can be made up of both a return on and return of
            capital.
            That composition may change over time, thus affecting an investor's after-tax
            return. Returns on capital are generally taxed as ordinary income in
            the hands
            of the Unitholders. Returns of capital are generally tax-deferred and
            thus
            reduce the holder's cost base in the Trust Units for capital gains calculation.
  U.S.
            Unitholders who receive cash distributions are subject to at least a
            15%
            Canadian withholding tax. This withholding tax is applied to both the
            taxable
            portion of the distribution as computed under Canadian tax law, and the
            non-taxable portion of the distribution. U.S. taxpayers may be eligible
            for a
            foreign tax credit with respect to the Canadian withholding tax paid.
  An
            investment in the Trust Units is subject to a number of risks that should
            be
            considered by an investor. The market value of the Trust Unit may deteriorate
            if
            the Trust is unable to meet its cash distribution targets in the future,
            and
            that deterioration maybe material. See "Risk Factors".
  -57-
  **Distribution
            History**
  The
            Trust
            pays monthly cash distributions to its Unitholders. Cash distributions
            are paid
            on the 15th of the following month (e.g. the December distribution was
            paid on
            January 15). The monthly cash distributions per Trust Unit since the
            inception
            of the Trust are as follows:
  **Month
                      of record (US$)**
                  
                  **2006**
                  
                  **2005**
                  
                  **2004**
                  
                  **2003**January
                  
                  **$**
                  **0.18**
                  
                  **$**
                  **0.14**
                  
                  $
                  0.10February
                  
                  **$**
                  **0.18**
                  
                  **$**
                  **0.14**
                  
                  $
                  0.10March
                  
                  **$**
                  **0.18**
                  
                  **$**
                  **0.15**
                  
                  $
                  0.11April
                  
                  
                  
                  
                  **$**
                  **0.15**
                  
                  $
                  0.11May
                  
                  
                  
                  
                  **$**
                  **0.15**
                  
                  $
                  0.11June
                  
                  
                  
                  
                  **$**
                  **0.16**
                  
                  $
                  0.12July
                  
                  
                  
                  
                  **$**
                  **0.16**
                  
                  $
                  0.12August
                  
                  
                  
                  
                  **$**
                  **0.16**
                  
                  $
                  0.12September
                  
                  
                  
                  
                  **$**
                  **0.17**
                  
                  $
                  0.13October
                  
                  
                  
                  
                  **$**
                  **0.17**
                  
                  $
                  0.13November
                  
                  
                  
                  
                  **$**
                  **0.17**
                  
                  $
                  0.13December
                  
                  
                  
                  
                  **$**
                  **0.18**
                  
                  $
                  0.14
                  
                  $
                  0.10
  **Market
            for Securities** ****
  **Trading
            Price and Volume**
 The
            outstanding Trust Units are traded on the TSX under the trading symbol
            "ENT.UN"
            and until February 9, 2006 on the NASDAQ under the symbol "EENC". Subsequent
            to
            February 9, 2006, the Trust Units commenced trading on the New York Stock
            Exchange ("NYSE") under the symbol "ENT". Following commencement of trading
            on
            the NYSE, the Trust Units ceased trading on the NASDAQ stock market under
            the
            symbol "EENC". The following table sets forth the price range and trading
            volume
            of the Trust Units as reported by the TSX and the NYSE/NASDAQ for the
            periods
            indicated:
  **TSX**
                  
                  **NYSE/NASDAQ**High
                      ($)
                  
                  Low
                      ($)
                  
                  Volume
                      (000's)
                  
                  High
                      (US$)
                  
                  Low
                      (US$)
                  
                  Volume
                      (000's)**2005**January
                  
                  
                  23.65
                  
                  
                  21.60
                  
                  
                  70,068
                  
                  
                  19.19
                  
                  
                  17.60
                  
                  
                  2,162,200February
                  
                  
                  26.80
                  
                  
                  22.03
                  
                  
                  983,718
                  
                  
                  21.60
                  
                  
                  17.61
                  
                  
                  4,916,500March
                  
                  
                  25.14
                  
                  
                  21.80
                  
                  
                  165,233
                  
                  
                  20.72
                  
                  
                  18.00
                  
                  
                  6,204,700April
                  
                  
                  28.84
                  
                  
                  24.45
                  
                  
                  215,205
                  
                  
                  24.40
                  
                  
                  20.00
                  
                  
                  6,745,800May
                  
                  
                  27.73
                  
                  
                  23.01
                  
                  
                  477,298
                  
                  
                  22.49
                  
                  
                  18.50
                  
                  
                  5,829,400June
                  
                  
                  29.34
                  
                  
                  23.85
                  
                  
                  928,689
                  
                  
                  24.00
                  
                  
                  19.00
                  
                  
                  8,943,700July
                  
                  
                  32.32
                  
                  
                  29.30
                  
                  
                  607,581
                  
                  
                  26.75
                  
                  
                  23.57
                  
                  
                  7,541,900August
                  
                  
                  30.37
                  
                  
                  23.85
                  
                  
                  1,565,803
                  
                  
                  25.20
                  
                  
                  19.80
                  
                  
                  12,249,900September
                  
                  
                  29.03
                  
                  
                  22.50
                  
                  
                  1,588,258
                  
                  
                  24.99
                  
                  
                  19.04
                  
                  
                  12,911,500October
                  
                  
                  28.79
                  
                  
                  25.00
                  
                  
                  275,059
                  
                  
                  24.84
                  
                  
                  21.33
                  
                  
                  5,146,300November
                  
                  
                  27.31
                  
                  
                  23.50
                  
                  
                  163,439
                  
                  
                  23.25
                  
                  
                  20.00
                  
                  
                  4,517,800December
                  
                  
                  25.00
                  
                  
                  18.50
                  
                  
                  538,324
                  
                  
                  20.90
                  
                  
                  15.76
                  
                  
                  15,410,300**2006**January
                  
                  
                  22.46
                  
                  
                  19.05
                  
                  
                  434,976
                  
                  
                  19.50
                  
                  
                  16.48
                  
                  
                  5,911,700February
                  
                  
                  21.89
                  
                  
                  19.50
                  
                  
                  287,919
                  
                  
                  19.10
                  
                  
                  17.02
                  
                  
                  3,944,200March(1)
                  
                  
                  21.03
                  
                  
                  18.41
                  
                  
                  621,100
                  
                  
                  18.60
                  
                  
                  15.76
                  
                  
                  5,768,200
 *(1)
            Information to March 27, 2006*
  **Prior
            Sales of Non-Listed Securities**
 Pursuant
            to the acquisition of RMG on June 1, 2005, there was an issuance of 736,842
            RMG
            Exchangeable Shares at Cdn $22.69 per share. Pursuant to the High Point
            Arrangement on August 17, 2005, there was an issuance of 1,407,177 RMAC
            Exchangeable Shares at $22.50 per share.
  -58-
  **Legal
            Proceedings** ****
  There
            are
            no outstanding legal proceedings material to Enterra to which Enterra
            is a party
            or in respect of which any of its properties are subject, nor are there
            any such
            proceedings known to Enterra to be contemplated.
  **Interest
            of Management and Others in Material Transactions**
  None
            of
            EEC's directors or executive officers, nor any person who beneficially
            owns
            directly or indirectly or exercises control or direction over securities
            carrying more than 10% of the voting rights attaching to the Trust Units,
            nor
            any known associate or affiliate of these persons, had any material interest,
            direct or indirect in any transaction since the commencement of the Trust's
            last
            three completed financial years which has materially affected
            Enterra.
  **Transfer
            Agent and Registrar**
  Olympia
            Trust Company, at its principal offices in Calgary, Alberta and at the
            principal
            offices of BNY Trust Company of Canada in Toronto, Ontario, is the transfer
            agent and registrar for the Trust Units.
  **Material
            Contracts**
  Agreements
            that may be considered material are set out below:
  ·
                  Trust
                      Indenture. See "Additional Information Respecting the
                      Trust".
  ·
                  Note
                      Indenture. See "Additional Information Respecting Enterra -
                      Series
                      Notes".
  ·
                  Administration
                      Agreement between the Trust and Enterra Energy. See "Additional
                      Information Respecting Enterra Energy Trust - Delegation of
                      Authority,
                      Administration and Trust
                      Governance".
  ·
                  Support
                      Agreements. See "Additional Information Respecting Enterra
                      Energy Trust -
                      Support Agreement".
  ·
                  Voting
                      and Exchange Trust Agreements. See "Additional Information
                      Respecting
                      Enterra Energy Trust -Voting and Exchange Trust
                      Agreements".
  **Interests
            of Experts** ****
  Reserve
            estimates contained herein are derived from reserve reports prepared
            by McDaniel
            and Sproule. As of the date hereof, neither McDaniel nor Sproule, or
            any of
            their shareholders owns directly or indirectly, any Trust Units.
  **Audit
            Committee**
  **General**
 Enterra
            Energy has established an Audit Committee (the "Audit Committee") comprised
            of
            three members: H.S. (Scobey) Hartley, Norman W.G. Wallace and William
            E. Sliney,
            each of whom is considered "independent" and "financially literate" within
            the
            meaning of Multilateral Instrument 52-110 - *Audit
            Committees* .
  **Mandate
            of the Audit Committee**
 The
            mandate of the Audit Committee is to assist the Board of Directors in
            its
            oversight of the integrity of the financial and related information of
            Enterra,
            including the financial statements, internal controls and procedures
            for
            financial reporting and the processes for monitoring compliance with
            legal and
            regulatory requirements. In doing so, the Audit Committee oversees the
            audit
            efforts of our external auditors and, in that regard, is empowered to
            take such
            actions as it may deem necessary to satisfy itself that our external
            auditors
            are independent of us. It is the objective of the Audit Committee to
            have
            direct, open and frank communications throughout the year with management,
            other
            committee chairmen, the external auditors, and other key committee advisors
            and
            Enterra staff members as applicable.
  The
            Audit
            Committee's function is oversight. Management of Enterra Energy is responsible
            for the preparation, presentation and integrity of the financial statements
            of
            Enterra. Management is responsible for maintaining appropriate accounting
            and
            financial reporting principles and policy and internal controls and procedures
            that provide for compliance with accounting standards and applicable
            laws and
            regulations.
  -59-
  While
            the
            Audit Committee has the responsibilities and powers set forth above,
            it is not
            the duty of the Audit Committee to plan or conduct audits or to determine
            whether the financial statements of Enterra are complete and accurate
            and are in
            accordance with generally accepted accounting principles. This is the
            responsibility of management and the external auditors, on whom the members
            of
            the Committee are entitled to rely upon in good faith.
  The
            Charter of the Audit Committee is attached hereto as Appendix "A".
  **Relevant
            Education and Experience of Audit Committee Members**
 The
            following is a brief summary of the education or experience of each member
            of
            the Audit Committee that is relevant to the performance of his responsibilities
            as a member of the Audit Committee, including any education or experience
            that
            has provided the member with an understanding of the accounting principles
            used
            by us to prepare our annual and interim financial statements.
 
 **Name
                      of Audit Committee Member**
                  
                  **Relevant
                      Education and Experience***H.S.
                      (Scobey) Hartley*
                  
                  Mr.
                      Hartley has been a director and officer of numerous public
                      and private
                      companies in the energy and construction sectors. He is well
                      versed in
                      understanding financial and reserves information. Mr. Hartley
                      holds a
                      Bachelor of Science in Geology from Texas Tech
                      University.*Norman
                      Wallace*
                  
                  Mr.
                      Wallace is the founder, director and CEO of a large private
                      construction
                      company located in Saskatchewan with overseas operations. He
                      is familiar
                      with financial information as presented in audited financial
                      statements
                      and annual and interim reports. Mr. Wallace holds a Bachelor
                      of Commerce
                      degree form the University of Saskatchewan.*William
                      Sliney*
                  
                  Mr.
                      Sliney is the chairman of the Audit Committee. He has held
                      various
                      executive positions with public companies in the U.S., the
                      most recent as
                      President of PASW, Inc. and as Chief Financial Officer of Legacy
                      Software.
                      Mr. Sliney holds a Masters degree in Business Administration
                      from UCLA. He
                      is experienced in dealing with public, audited financial information
                      and
                      is familiar with current accounting and auditing
                      issues.
  -60-
 
 **External
            Auditor Service Fees**
 KPMG
            LLP
            audited our annual financial statements for the 2005 and 2004 fiscal
            year.
            Deloitte & Touché LLP reviewed our interim financial statements up to
            the fiscal quarter ended September 30, 2004.
 (in
                      $ thousands)
                  **2005**
                  **2004**Audit
                      fees (1)
                  727.6
                  314.1Audit-related
                      fees (2)
                  -
                  -Tax
                      fees (3)
                  40.5
                  12.5All
                      other fees (4)
                  -
                  -768.1
                  326.6
  Notes:
 (1)
                  Audit
                      fees include professional services rendered by KPMG LLP for
                      the audit of
                      Enterra's annual financial statements as well as services provided
                      in
                      connection with statutory and regulatory filings and engagements.
                      A
                      portion of the audit fees rendered by Deloitte & Touché LLP for the
                      2003 year was paid in 2004.
 (2)
                  Audit-related
                      fees are fees charged by KPMG LLP for reviews of Enterra's
                      interim
                      financial statements.
 (3)
                  Tax
                      fees include fee for tax compliance, tax advice and tax planning.
 (4)
                  All
                      other fees were nil.
 
 **Audit
            Committee Oversight**
 At
            no
            time since the commencement of our most recently completed financial
            year, has a
            recommendation of the Audit Committee to nominate or compensate an external
            auditor not been adopted by the Board of Directors.
  **Additional
            Information** ****
  Additional
            information relating to the Trust may be found on SEDAR at www.sedar.com .
            Additional information related to the remuneration and indebtedness of
            the
            directors and officers of Enterra Energy, the principal holders of Trust
            Units,
            the Trust Units authorized for issuance equity compensation plans and
            corporate
            governance disclosure, is contained in the management information circular
            in
            respect of the next annual meeting of Unitholders of the Trust. Additional
            financial information is provided in the audited financial statements
            and
            management discussion and analysis of the Trust for the year ended
            December 31, 2005.
  **Appendix
            "A" -**
  **Audit
            Committee Charter**
  **Organization**
 There
            shall be a committee of the board of directors to be known as the audit
            committee. The audit committee shall be composed of directors who are
            independent of the management of the corporation and are free of any
            relationship that, in the opinion of the board of directors, would interfere
            with their exercise of independent judgment as a committee member. For
            purposes
            of serving as a member of the audit committee, directors being considered
            shall
            comply with the Independent Director and Audit Committee requirements
            pursuant
            to New York Stock Exchange Market Place Rules and NI 52-110 of the
            Canadian Securities Administrators. Examples of such relationships
            include:
  •
                  A
                      director being employed by the corporation or any of its affiliates
                      for
                      the current year or any of the past five
                      years;
  •
                  A
                      director accepting any compensation from the corporation or
                      any of its
                      affiliates other than compensation for board service or benefits
                      under a
                      tax-qualified retirement plan;
  •
                  A
                      director being a member of the immediate family of an individual
                      who is,
                      or has been in any of the past five years, employed by the
                      corporation or
                      any of its affiliates, or predecessors as an executive
                      officer;
  •
                  A
                      director being a partner in, or a controlling shareholder or
                      an executive
                      officer of, any for-profit business organization to which the
                      corporation
                      made, or from which the corporation received, payments that
                      are or have
                      been significant to the corporation or business organization
                      in any of the
                      past five years;
  •
                  A
                      director being employed as an executive of another company
                      where any of
                      the corporation's executives serves on that company's compensation
                      committee.
  A
            director who has one or more of these relationships may be appointed
            to the
            audit committee, if the board, under exceptional and limited circumstances,
            determines that membership on the committee by the individual is required
            by the
            best interests of the corporation, its affiliates and the unitholders
            of Enterra
            Energy Trust (the "Trust"), and the board discloses, in the next annual
            proxy
            statement subsequent to such determination, the nature of the relationship
            and
            the reasons for that determination.
  -61-
  **Statement
            of Policy**
 The
            audit
            committee shall provide assistance to the corporate directors in fulfilling
            their responsibility to the unitholders of the Trust, potential unit
            holders,
            and investment community relating to accounting, reporting practices
            of the
            Trust, and the quality and integrity of the financial reports of the
            corporation. In so doing, it is the responsibility of the audit committee
            to
            maintain free and open means of communication between the directors,
            the
            independent auditors. the internal auditors, and the financial management
            of the
            corporation.
  **Responsibilities**
 In
            carrying out its responsibilities, the audit committee believes its policies
            and
            procedures should remain flexible, in order to best react to changing
            conditions
            and to ensure to the directors and unitholders of the Trust that the
            accounting
            and reporting practices of the Trust are in accordance with all requirements
            and
            are of the highest quality. In carrying out these responsibilities, the
            audit
            committee will:
  ·
                  Review
                      and recommend to the directors the independent auditors to
                      be selected to
                      audit the financial statements of the Trust and its
                      subsidiaries.
  ·
                  Meet
                      with the independent auditors and financial management of the
                      corporation
                      to review the scope of the proposed audit for the current year
                      and the
                      audit procedures to be utilized, and at the conclusion thereof
                      review such
                      audit, including any comments or recommendations of the independent
                      auditors.
  ·
                  Review
                      with the independent auditors, the Trust's internal auditor,
                      and financial
                      and accounting personnel, the adequacy and effectiveness of
                      the accounting
                      and financial controls of the corporation, and elicit any recommendations
                      for the improvement of such internal control procedures or
                      particular
                      areas where new or more detailed controls or procedures are
                      desirable.
                      Particular emphasis should be given to the adequacy of such
                      internal
                      controls to expose any payments, transactions, or procedures
                      that might be
                      deemed illegal or otherwise improper. Further, the committee
                      periodically
                      should review company policy statements to determine their
                      adherence to
                      the code of conduct.
  ·
                  Review
                      the internal audit function of the Trust including the independence
                      and
                      authority of its reporting obligations, the proposed audit
                      plans for the
                      coming year, and the coordination of such plans with the independent
                      auditors.
  ·
                  Receive
                      prior to each meeting, a summary of findings from completed
                      internal
                      audits and a progress report on the proposed internal audit
                      plan, with
                      explanations for any deviations from the original
                      plan.
  ·
                  Review
                      the financial statements contained in the annual report to
                      shareholders
                      with management and the independent auditors to determine that
                      the
                      independent auditors are satisfied with the disclosure and
                      content of the
                      financial statements to be presented to the unitholders of
                      the Trust. Any
                      changes in accounting principles should be
                      reviewed.
  ·
                  Provide
                      sufficient opportunity for the internal and independent auditors
                      to meet
                      with the members of the audit committee without members of
                      management
                      present. Among the items to be discussed in these meetings
                      are the
                      independent auditors' evaluation of the Trust's financial,
                      accounting, and
                      auditing personnel, and the cooperation that the independent
                      auditors
                      received during the course of the
                      audit.
  ·
                  Review
                      accounting and financial human resources and succession planning
                      within
                      the Trust and its subsidiaries.
  ·
                  Submit
                      the minutes of all meetings of the audit committee to, or discuss
                      the
                      matters discussed at each committee meeting with, the board
                      of
                      directors.
  ·
                  Investigate
                      any matter brought to its attention within the scope of its
                      duties, with
                      the power to retain outside counsel for this purpose if, in
                      its judgment,
                      that is appropriate.
  ·
                  Pre-approve
                      all non-audit services to be provided to the Trust and its
                      subsidiaries.
  ·
                  Review
                      the Trust's financial statements, MD&A, and annual and interim
                      earnings press release before the Trust publicly discloses
                      this
                      information.
  -62-
  ·
                  Satisfy
                      itself that adequate procedures are in place for the review
                      of Trust's
                      public disclosure of financial information extracted or derived
                      from the
                      Trust's financial statements, other than the public and periodically
                      assess the adequacy of those
                      procedures.
  ·
                  Establish
                      procedures for: (a) the receipt, retention and treatment of
                      complaints
                      received by the Trust regarding accounting, internal accounting
                      controls,
                      or auditing matters; and (b) the confidential, anonymous submission
                      by
                      employees of the issuer of concerns regarding questionable
                      accounting or
                      auditing matters.
  ·
                  Review
                      and approve the hiring policies of the Trust and its subsidiaries
                      regarding partners, employees and former partners and employees
                      of the
                      present and former external auditor of the
                      Trust.
  -63-
  **Appendix
            "B-1" -**
 **Report
            on Reserves Data by Independent Qualified Reserves Evaluator or
            Auditor**
  Terms
            to
            which a meaning is ascribed in National Instrument 51-101 have the same
            meaning
            herein.
  To
            the
            Board of Directors of Enterra Energy Corp. **** (the
            " **Company** "):
  1.
                  We
                      have evaluated Enterra's Canadian reserves data as at December
                      31, 2005.
                      The reserves data consists of the
                      following:
  (a)
                  (i)
                  proved
                      and proved plus probable oil and gas reserves estimated as
                      at December 31,
                      2005 using forecast prices and costs;
                      and
 (ii)
                  the
                      related estimated future net revenue;
                      and
 (b)
                  (i)
                  proved
                      oil and gas reserves estimated as at December 31, 2005 using
                      constant
                      prices and costs; and
 (ii)
                  the
                      related estimated future net
                      revenue.
  2.
                  The
                      reserves data are the responsibility of the Company's management.
                      Our
                      responsibility is to express an opinion on the reserves data
                      based on our
                      evaluation.
  We
            carried out our evaluated in accordance with standards set out in the
            Canadian
            Oil and Gas Evaluation Handbook (the " **COGE
            Handbook** ")
            prepared jointly by the Society of Petroleum Evaluation Engineers (Calgary
            Chapter) and the Canadian Institute of Mining, Metallurgy & Petroleum
            (Petroleum Society).
  3.
                  Those
                      standards require that we plan and perform an evaluation to
                      obtain
                      reasonable assurance as to whether the reserves data are free
                      of material
                      misstatement. An evaluation also includes assessing whether
                      the reserves
                      data are in accordance with principles and definitions in the
                      COGE
                      Handbook.
  4.
                  The
                      following table sets forth the estimated future net revenue
                      (before
                      deduction of income taxes) attributed to proved plus probable
                      reserves,
                      estimated using forecast prices and costs and calculated using
                      a discount
                      rate of 10 percent, included in the reserves data of the Company
                      evaluated
                      by us for the year ended December 31, 2005, and identifies
                      the respective
                      portion thereof that we have evaluated, audited and reviewed
                      and reported
                      on to the Company's management.
  Description
                      and Preparation Data of Audit/ Evaluation/ Review Report
                  Location
                      of Reserves (Country or Foreign Geographic Area)
                  Net
                      Present Value of Future Net Revenue
                    (before
                      income taxes 10% discount rate - $M)Audited
                  Evaluated
                  Reviewed
                  TotalDecember
                      31, 2005
                  Canada
                  $
                      -
                  $377,947.9
                  $
                      -
                  $377,947.9
  5.
                  In
                      our opinion, the reserves data respectively evaluated by us
                      have, in all
                      material respects, been determined and are in accordance with
                      the COGE
                      Handbook.
  6.
                  We
                      have no responsibility to update this evaluation for events
                      and
                      circumstances occurring after their respective preparation
                      date.
  7.
                  Because
                      the reserves data are based on judgements regarding future
                      events, actual
                      results will vary and the variations may be
                      material.
  Executed
            as to our report referred to above.
  (signed)
  **McDaniel
            & Associates Consultants Ltd.**
 Calgary,
            Alberta
  March
            31,
            2006.
  -64-
  **Appendix
            "B-2" -**
 **Report
            on Reserves Data by Independent Qualified Reserves Evaluator or
            Auditor**
  Terms
            to
            which a meaning is ascribed in National Instrument 51-101 have the same
            meaning
            herein.
  To
            the
            Board of Directors of Rocky Mountain Gas, Inc. **** (the
            " **Company** "):
  1.
                  We
                      have evaluated the Company reserves data as at December 31,
                      2005. The
                      reserves data consists of the
                      following:
  (a)
                  (i)
                  proved
                      and proved plus probable oil and gas reserves estimated as
                      at December 31,
                      2005 using forecast prices and costs;
                      and
 (ii)
                  the
                      related estimated future net revenue;
                      and
 (b)
                  (i)
                  proved
                      oil and gas reserves estimated as at December 31, 2005 using
                      constant
                      prices and costs; and
 (ii)
                  the
                      related estimated future net
                      revenue.
  2.
                  The
                      reserves data are the responsibility of the Company's management.
                      Our
                      responsibility is to express an opinion on the reserves data
                      based on our
                      evaluation.
  We
            carried out our evaluated in accordance with standards set out in the
            Canadian
            Oil and Gas Evaluation Handbook (the " **COGE
            Handbook** ")
            prepared jointly by the Society of Petroleum Evaluation Engineers (Calgary
            Chapter) and the Canadian Institute of Mining, Metallurgy & Petroleum
            (Petroleum Society).
  3.
                  Those
                      standards require that we plan and perform an evaluation to
                      obtain
                      reasonable assurance as to whether the reserves data are free
                      of material
                      misstatement. An evaluation also includes assessing whether
                      the reserves
                      data are in accordance with principles and definitions in the
                      COGE
                      Handbook.
  4.
                  The
                      following table sets forth the estimated future net revenue
                      (before
                      deduction of income taxes) attributed to proved plus probable
                      reserves,
                      estimated using forecast prices and costs and calculated using
                      a discount
                      rate of 10 percent, included in the reserves data of the Company
                      evaluated
                      by us for the year ended December 31, 2005, and identifies
                      the respective
                      portion thereof that we have evaluated, audited and reviewed
                      and reported
                      on to the Company's management.
  Description
                      and Preparation Data of Audit/Evaluation/Review Report
                  Location
                      of Reserves (Country or Foreign Geographic Area)
                  Net
                      Present Value of Future Net Revenue
                    (before
                      income taxes 10% discount rate - $MMUS)Audited
                  Evaluated
                  Reviewed
                  TotalEvaluation
                      of the Natural Gas Reserves Powder River Basin, Wyoming
                    December
                      31, 2005
                  USA
                  $
                      -
                  $4.543
                  $
                      -
                  $4.543
  5.
                  In
                      our opinion, the reserves data respectively evaluated by us
                      have, in all
                      material respects, been determined and are in accordance with
                      the COGE
                      Handbook.
  6.
                  We
                      have no responsibility to update this evaluation for events
                      and
                      circumstances occurring after their respective preparation
                      date.
  7.
                  Because
                      the reserves data are based on judgements regarding future
                      events, actual
                      results will vary and the variations may be
                      material.
  Executed
            as to our report referred to above.
  (signed)
  **Sproule
            Associates Inc.**
 Denver,
            Colorado
  March
            31,
            2006.
  -65-
  **Appendix
            "C" -**
 **Report
            of Management and Directors on Reserve Data and Other
            Information**
  Management
            of Enterra Energy Corp. (the " **Company** "),
            as
            administrator of Enterra Energy Trust (the " **Trust** "),
            are
            responsible for the preparation and disclosure of information with respect
            to
            the Trust's oil and gas activities in accordance with securities regulatory
            requirements. This information includes reserves data, which consist
            of the
            following:
 (a)
                    (i)
                    proved
                      and proved plus probable oil and gas reserves estimated as
                      at December 31,
                      2005 using forecast prices and costs; and
 (ii)
                    the
                      related estimated future net revenue; and
 (b)
                    (i)
                    proved
                          oil and gas reserves estimated as at December 31, 2005
                          using constant
                          prices and costs; and
 (ii)
                    the
                      related estimated future net
                      revenue.
 
 An
            independent qualified reserves evaluator has evaluated the Trust's reserves
            data. The report of the independent qualified reserves evaluator is presented
            in
            the Annual Information Form for Enterra Energy Trust effective as of
            December
            31, 2005.
  The
            Reserves Committee of the Board of Directors of the Company has:
  (a)
                  reviewed
                      the Trust's procedures for providing information to the independent
                      qualified reserves evaluator;
 (b)
                  met
                      with the independent qualified reserves evaluator to determine
                      whether any
                      restrictions affected the ability of the independent qualified
                      reserves
                      evaluator to report without reservation, to inquire whether
                      there had been
                      disputes between the previous independent qualified reserves
                      evaluator and
                      management; and
 (c)
                  reviewed
                      the reserves data with management and the independent qualified
                      reserves
                      evaluator.
 
 The
            Reserves Committee of the Board of Directors of the Company has reviewed
            the
            Trust's procedures for assembling and reporting other information associated
            with oil and gas activities and has reviewed that information with management.
            The Board of Directors has, on the recommendation of the Reserves Committee,
            approved:
  (a)
                  the
                      content and filing with securities regulatory authorities of
                      the reserves
                      data and other oil and gas
                      information;
 (b)
                  the
                      filing of the report of the independent qualified reserves
                      evaluator on
                      the reserves data; and
 (c)
                  the
                      content and filing of this report.
  Because
            the reserves data are based on judgements regarding future events, actual
            results will vary and the variations may be material.
  (signed)E.
                      Keith Conrad
                    President,
                      Chief Executive Officer(signed)John
                      Kalman, CA
                    Chief
                      Financial Officer(signed)William
                      E. Sliney
                    Director(signed)Herman
                      S. Hartley
                    Director
 March
            31,
            2006
  -66-
  **Appendix
            "D" -**
 **Cease
            Trade Orders, Bankruptcies, Penalties or Sanctions**
  The
            following information is with respect to Mr. Conrad and Mr. Kalman:
  On
            March
            20, 2000, Niaski Environmental Inc., which Mr. Conrad was then an insider
            and
            control person, made a proposal to its creditors under the *Bankruptcy
            Act* ,
            which
            was approved by the creditors on April 13, 2000. The trustee was discharged
            in
            May, 2001. On April 12, 2002, Rimron Resources Inc. (then Niaski Environmental
            Inc.) was involuntarily delisted from the Canadian Venture Exchange.
            The trustee
            was discharged in May, 2001.
  In
            July
            2000, cease trade orders were issued by the Alberta, B.C. and Saskatchewan
            Securities Commission against Niaski Environmental Inc., which Mr. Conrad
            was
            then an insider and control person, for failure to file financial statements.
            The deficiencies were rectified and the cease trade orders lifted.
  Mr.
            Kalman was the Vice President, Finance and Chief Financial Officer and
            a
            director of Gauntlet Energy Corporation in June 2003 when it filed for
            and was
            granted an order pursuant to the Companies' Creditors Arrangement Act
            (Canada).
            A plan of arrangement for that company received court confirmation later
            that
            year.
  -67-