Document:

EXHIBIT 4.1

               DATED AUGUST 2, 1996 AND RESTATED NOVEMBER 6, 2002

                             PRIMEWEST ENERGY TRUST

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                              AMENDED AND RESTATED
                              DECLARATION OF TRUST

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                             PRIMEWEST ENERGY TRUST

                              AMENDED AND RESTATED
                              DECLARATION OF TRUST

                                    ARTICLE 1
                                 INTERPRETATION

1.1     Definitions ......................................................    1
1.2     Meaning of "Outstanding" .........................................    8
1.3     Headings .........................................................    8
1.4     Construction of Terms ............................................    8
1.5     References to Acts Performed by the Trust ........................    9
1.6     Proposed Amendments to the Income Tax Act ........................    9

                                    ARTICLE 2
                                    THE TRUST

2.1     Settlement of Trust ..............................................    9
2.2     Declaration of Trust .............................................    9
2.3     Name .............................................................    9
2.4     Nature of the Trust ..............................................   10
2.5     Rights of Unitholders ............................................   10
2.6     Liability of Unitholders .........................................   10
2.7     Contracts of the Trust ...........................................   11
2.8     Head Office of Trust .............................................   11

                                    ARTICLE 3
                                      UNITS

3.1     Designation and Number of Units ..................................   11
3.2     Offerings of Units ...............................................   12
3.3     Ranking of Units .................................................   12
3.4     Units Non-Assessable .............................................   12
3.5     No Conversion, Retraction, Redemption or Pre-Emptive Rights ......   12
3.6     No Fractional Units ..............................................   12
3.7     Transferability of Units .........................................   12
3.8     Non-Resident Unitholders .........................................   12
3.9     Re-Purchase of Initial Unit by Trust .............................   13
3.10    Special Voting Units .............................................   13

                                      (i)

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                                    ARTICLE 4
                          INVESTMENT OF THE TRUST FUND

4.1     Investments ......................................................   14
4.2     Short Term Investments ...........................................   14
4.3     Other Investment Restrictions ....................................   15

                                    ARTICLE 5
                                  DISTRIBUTIONS

5.1     Distributions ....................................................   15
5.2     Change of Distribution Date ......................................   15
5.3     Net Income for Income Tax Purposes to Become Payable..............   15
5.4     Payment of Amounts Payable .......................................   16
5.5     Reinvestment of Distributions ....................................   16

                                    ARTICLE 6
                               REDEMPTION OF UNITS

6.1     Right of Redemption ..............................................   17
6.2     Exercise of Redemption Right .....................................   17
6.3     Cash Redemption ..................................................   17
6.4     No Cash Redemption in Certain Circumstances ......................   18
6.5     In Specie Redemption .............................................   19
6.6     Cancellation of Certificates for all Redeemed Units ..............   20
6.7     Deemed Cancellation of Units Tendered into a Take-Over Bid .......   20

                                    ARTICLE 7
               APPOINTMENT, RESIGNATION AND REMOVAL OF THE TRUSTEE

7.1     Trustee's Term of Office .........................................   20
7.2     Resignation of Trustee ...........................................   21
7.3     Removal of Trustee ...............................................   21
7.4     Appointment of Successor to Trustee ..............................   21
7.5     Failure to Appoint Successor .....................................   22
7.6     Qualifications of Trustee ........................................   22

                                    ARTICLE 8
                             CONCERNING THE TRUSTEE

8.1     Powers of the Trustee and the Corporation ........................   22
8.2     Specific Powers and Authorities ..................................   23
8.3     Banking ..........................................................   26
8.4     Standard of Care .................................................   26
8.5     Fees and Expenses ................................................   27
8.6     Limitations on Liability of Trustee ..............................   27
8.7     Indemnification of Trustee .......................................   28

                                     (ii)

<PAGE>

8.8     Environmental Indemnity ..........................................   28
8.9     Apparent Authority ...............................................   29
8.10    Notice to Unitholders of Non-Eligibility for Deferred Income Plans   30
8.11    Declaration as to Beneficial Owner ...............................   30
8.12    Conditions Precedent to Trustee's Obligation to Act ..............   30
8.13    Survival of Indemnities ..........................................   31
8.14    Trustee May Have Other Interests .................................   31
8.15    Documents Held by Trustee ........................................   31
8.16    Limitations on Borrowing .........................................   32
8.17    Credit Facilities Unaffected .....................................   32

                        ARTICLE 9 MANAGEMENT OF THE TRUST

9.1     Delegation of Management .........................................   33
9.2     Offerings ........................................................   33
9.3     Power of Attorney ................................................   34
9.4     Liability of Trustee .............................................   34
9.5     Performance of Obligations .......................................   34

                                   ARTICLE 10
                                    AMENDMENT

10.1    Amendment ........................................................   34
10.2    Notification of Amendment ........................................   35

                                   ARTICLE 11
                             MEETINGS OF UNITHOLDERS

11.1    Meetings of Unitholders ..........................................   35
11.2    Notice of Meetings ...............................................   36
11.3    Quorum ...........................................................   36
11.4    Voting Rights of Unitholders .....................................   36
11.5    Actions Requiring Ordinary Resolutions ...........................   37
11.6    Actions Requiring Special Resolutions ............................   37
11.7    Meaning of "Special Resolution" ..................................   38
11.8    Record Date for Voting ...........................................   39
11.9    Binding Effect of Resolutions ....................................   39
11.10   Appointment of Inspector .........................................   39
11.11   Solicitation of Proxies ..........................................   40
11.12   No Breach ........................................................   40

                                   ARTICLE 12
                CERTIFICATES, REGISTRATION AND TRANSFER OF UNITS

12.1    Nature of Units ..................................................   40
12.2    Certificates .....................................................   40

                                    (iii)

<PAGE>

12.3    Contents of Certificates .........................................   41
12.4    Signing of Certificates ..........................................   42
12.5    Register of Unitholders ..........................................   42
12.6    Transfer of Units ................................................   43
12.7    Units Held Jointly or in a Fiduciary Capacity ....................   43
12.8    Performance of Trust .............................................   44
12.9    Lost Certificates ................................................   44
12.10   Death of a Unitholder ............................................   44
12.11   Unclaimed Interest or Distribution ...............................   45
12.12   Exchanges of Certificates ........................................   45

                                   ARTICLE 13
                                OFFERS FOR UNITS

13.1    Terminology ......................................................   45
13.2    Offers for Units .................................................   46
13.3    Compulsory Acquisition Rights ....................................   46
13.4    Trustee's Duties .................................................   47
13.5    Restrictions .....................................................   48

                                   ARTICLE 14
                                POWER OF ATTORNEY

14.1    Power of Attorney ................................................   48

                                   ARTICLE 15
                                   TERMINATION

15.1    Termination Date .................................................   49
15.2    Termination by Resolution of Unitholders .........................   49
15.3    Procedure Upon Termination .......................................   49
15.4    Powers of the Trustee upon Termination ...........................   49
15.5    Sale of Investments ..............................................   49
15.6    Distribution of Proceeds .........................................   50
15.7    Further Notice to Unitholders ....................................   50
15.8    Responsibility of Trustee after Sale and Conversion ..............   50

                                   ARTICLE 16
                             SUPPLEMENTAL INDENTURES

16.1    Provision for Supplemental Indentures ............................   50

                                   ARTICLE 17
                             NOTICES TO UNITHOLDERS

17.1    Notices ..........................................................   51
17.2    Failure to Give Notice ...........................................   51

                                     (iv)

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17.3    Joint Holders ....................................................   51
17.4    Service of Notice ................................................   51

                                   ARTICLE 18
                             AUDITORS AND DIRECTORS

18.1    Qualification of Auditors ........................................   52
18.2    Appointment of Auditors ..........................................   52
18.3    Change of Auditors ...............................................   52
18.4    Reports of Auditors ..............................................   52
18.5    Appointment and Removal of Directors .............................   52

                                   ARTICLE 19
                   ACCOUNTS, RECORDS AND FINANCIAL STATEMENTS

19.1    Records ..........................................................   53
19.2    Quarterly Reporting to Unitholders ...............................   53
19.3    Annual Reporting to Unitholders ..................................   53
19.4    Information Available to Unitholders .............................   53
19.5    Income Tax: Obligations of the Trustee ...........................   54
19.6    Income Tax: Designations .........................................   54
19.7    Income Tax: Deductions ...........................................   55
19.8    Fiscal Year ......................................................   55

                                   ARTICLE 20
                                  MISCELLANEOUS

20.1    Continued Listing ................................................   55
20.2    Successors and Assigns ...........................................   55
20.3    Counterparts .....................................................   55
20.4    Severability .....................................................   55
20.5    Day Not a Business Day ...........................................   56
20.6    Time of the Essence ..............................................   56
20.7    Governing Law ....................................................   56
20.8    Notices to Trustee and Corporation ...............................   56
20.9    References to Agreements .........................................   58

                                     (v)

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                              AMENDED AND RESTATED
                              DECLARATION OF TRUST

   THIS Amended and Restated Declaration of Trust is made August 2, 1996 and
                           restated November 6, 2002

                                     Between

                              PRIMEWEST ENERGY INC.
               a body corporate incorporated under the laws of the
               Province of Alberta, with an office in the City of
             Calgary, in the Province of Alberta (the "Corporation")

                                       and

                      COMPUTERSHARE TRUST COMPANY OF CANADA
                 a trust company incorporated under the laws of
               Canada, with offices in the City of Calgary, in the
                       Province of Alberta (the "Trustee")

      WHEREAS the Trust has been  created for the  purpose of  providing  income
from oil and natural gas properties on a periodic basis to the  beneficiaries of
the Trust; and

      WHEREAS  the  Trustee has agreed to act as the trustee of the Trust on the
terms and  conditions  set forth in this  Amended and  Restated  Declaration  of
Trust;

      IN  CONSIDERATION  of the  premises  and the mutual  agreements  contained
herein, the Corporation and the Trustee agree as follows:

                                   ARTICLE 1
                                 INTERPRETATION

1.1   Definitions

      In this Declaration of Trust and in the  Certificates,  unless the context
otherwise requires, the following terms have the following meanings:

      Affiliate has the meaning set forth in the Securities  Act  (Alberta),  as
      amended from time to time;

      ARTC means royalty tax credit as defined in the Alberta Corporate Tax Act;

      Associate has the meaning set forth in the Securities  Act  (Alberta),  as
      amended from time to time;

<PAGE>

      Auditors means the firm of chartered accountants appointed as auditors of
      the Trust by or in accordance with Article 18;

      Business Day means any day other than a Saturday, Sunday or statutory
      holiday in Alberta;

      Certificate means a certificate evidencing one or more Units;

      Corporation means PrimeWest Energy Inc., its successors and assigns;

      Counsel means a law firm (which may be counsel to the Corporation)
      reasonably acceptable to the Trustee;

      Date of Closing means the date on which an issue of Units pursuant to an
      Offering is completed;

      Debt Service Costs means, in respect of any period and without
      duplication, on a consolidated basis:

      (a)   all interest,  penalties, fees, indemnities,  legal costs, and other
            costs,   expenses  and   disbursements  for  which  the  Trust,  the
            Corporation,  and their  respective  subsidiaries  are liable  under
            their respective  credit  facilities and which, in each case, accrue
            during such period;

      (b)   plus all amounts  payable during such period on account of principal
            pursuant to such credit facilities  including,  without  limitation,
            scheduled,   prepaid   (voluntary  or  mandatory)  and   accelerated
            principal and (subject to the provisos below) amounts required to be
            paid on account of banker's acceptances and letters of credit (other
            than fees described in (a) above);

      (c)   plus (if there is a net  loss) or minus  (if there is a net  profit)
            the net profit or loss from interest rate swaps which accrues during
            such period;

      provided  that the  difference  between  the  face  amount  of a  banker's
      acceptance which is issued and accepted pursuant to such credit facilities
      and its discount  proceeds (such difference being the "imputed  interest")
      shall be treated as interest  accruing at the times that it is  considered
      to accrue in accordance with generally accepted accounting  principles and
      provided  that  when  the  Trust,  the  Corporation  or  their  respective
      subsidiaries  become  liable  under any  credit  facility  to pay the face
      amount  of a  banker's  acceptance,  the face  amount  less the  amount of
      imputed  interest for such  banker's  acceptance  shall be included in the
      Debt Service Costs;

      Deferred Purchase Price Obligation has the meaning  attributed  thereto in
      the Royalty Agreement;

                                     - 2 -

<PAGE>

      Directors means the directors of the Corporation from time to time.

      Discount Rate means an annual rate equal to the then current  annual yield
      of long-term  (10 year)  Government of Canada bonds plus 400 basis points,
      subject to a maximum Discount Rate of 15%;

      Distribution  Date means a date on which the Trustee is required to make a
      distribution  of  Distributable  Income,  which date shall be the 15th day
      following  a Record Date or, if such day is not a Business  Day,  the next
      Business Day;

      Distributable  Income  means,  in  respect  of a Record  Date,  the amount
      calculated as of the corresponding Distribution Date equal to the sum of:

      (a)   all  amounts  received  by the Trust in respect of the Royalty on or
            before such  Distribution  Date and after the immediately  preceding
            Distribution Date;

      (b)   all ARTC received by the Trust on or before such  Distribution  Date
            and after the immediately preceding Distribution Date; and

      (c)   all  other   income   received  by  the  Trust  on  or  before  such
            Distribution Date and after the immediately  preceding  Distribution
            Date from investments of the Trust Fund;

      less the sum of:

      (d)   all Trust Expenses  incurred on or before such Distribution Date and
            after the immediately preceding Distribution Date;

      (e)   any other amounts  (including taxes) required by law or hereunder to
            be  deducted,  withheld  or paid by or in respect of the Trust on or
            before such  Distribution  Date and after the immediately  preceding
            Distribution Date; and

      (f)   all Crown royalties and other Crown charges which are not deductible
            for income tax purposes and that have been reimbursed by the Trust
            to the Corporation by way of set-off or otherwise on or before such
            Distribution Date and after the immediately preceding Distribution
            Date;

      except to the extent that any  portion of such  amount has become  payable
      under  Section  5.3 before that  Distribution  Date;  notwithstanding  the
      foregoing,  for the purposes of calculating  Distributable  Income for the
      first  Distribution  Date, the references  above to "after the immediately
      preceding  Distribution  Date" shall be deemed to be  references to "on or
      after the Date of Closing";

                                     - 3 -

<PAGE>

      Exchangeable  Share means shares in the capital of the  Corporation  or an
      Affiliate of the Corporation  which are by their terms  exchangeable  into
      Units of the Trust;

      Income  Tax Act means the  Income  Tax Act  (Canada)  and the  Income  Tax
      Regulations and the Income Tax Application  Rules  applicable with respect
      thereto, all as amended from time to time;

      Indemnified Parties has the meaning thereto attributed in Section 8.7;

      Initial Offering means the Offering pursuant to the Prospectus;

      Initial Unitholder means D. Jeff van Steenbergen;

      Issue  Expenses  means all  expenses of an  Offering  payable by the Trust
      including legal fees,  translation fees, engineering fees, accounting fees
      and  printing  expenses  and all  other  fees and  expenses  which  may be
      described,  whether  generally or specifically,  in any Offering  Document
      relating to the particular Offering, but excluding Underwriters' Fees;

      Management  Agreement  means the  agreement  between  the  Manager and the
      Trustee whereby the Manager was engaged to provide certain services to the
      Trustee in connection with the management and  administration of the Trust
      and the Trust Fund;

      Manager means PrimeWest Energy Inc., its successors and permitted assigns,
      in its capacity as manager of the Trust in accordance  with the provisions
      of the Management Agreement and shall be deemed to include any replacement
      or successor managers pursuant to such agreement;

      Material   Contracts  means  the  Royalty  Agreement  and  the  Management
      Agreement,  as amended or replaced from time to time, and any Underwriting
      Agreement;

      Net  Proceeds  means  the  proceeds  of an  Offering  after  deduction  of
      Underwriters' Fees and Issue Expenses;

      Offering  means an offering  of Units or any rights to acquire  Units on a
      public or private  basis  pursuant  to an  Offering  Document in Canada or
      elsewhere;

      Offering  Document  means  any one or more  of a  prospectus,  information
      memorandum,  private  placement  memorandum  and similar public or private
      offering document, including the Prospectus;

      Ordinary   Resolution  means  a  resolution   approved  at  a  meeting  of
      Unitholders  by  more  than  50% of  the  votes  cast  in  respect  of the
      resolution by or on behalf of Unitholders present in person or represented
      by proxy at the meeting;

                                     - 4 -

<PAGE>

      Outstanding, in relation to Units, has the meaning attributed thereto in
      Section 1.2;

      Person  means an  individual,  corporation,  partnership,  joint  venture,
      unincorporated   association,   trust  or  other  entity   including   any
      governmental entity, and pronouns have a similarly extended meaning;

      Pro Rata Share of any particular  amount in respect of a Unitholder at any
      time shall be the product obtained by multiplying the particular amount by
      the  number  obtained  when the  number  of Units  that are  owned by that
      Unitholder  at  that  time  is  divided  by  the  total  number  of  Units
      Outstanding at that time;

      Properties means Canadian resource properties as defined in the Income Tax
      Act;

      Prospectus means the prospectus for the initial public offering of Units
      dated October 3, 1996;

      Quarter means a period of three  consecutive  calendar months ending March
      31, June 30,  September 30 or December 31 or such other dates  selected by
      the Trustee pursuant to Section 5.2;

      Record Date means the last day of each calendar month in each Year or such
      other dates selected by the Trustee pursuant to Section 5.2;

      Reserve Value means the present worth of all of the estimated  pre-tax net
      cash flow from the proved  reserves and 50% of the  estimated  pre-tax net
      cash flow from the probable reserves shown in the most recent  engineering
      report  relating  thereto,  discounted  at the  Discounted  Rate and using
      escalating price and cost assumptions;

      Royalty means the royalty payable by the Corporation to the Trust pursuant
      to the Royalty Agreement;

      Royalty  Agreement means the royalty  agreement dated October 16, 1996 and
      amended  and  restated   November  6,  2002  between  the  Trust  and  the
      Corporation providing for the acquisition by the Trust of a royalty in the
      Properties  of the  Corporation  as such royalty  agreement may be amended
      from time to time;

      Settled Amount means the amount of $100.00 paid by the Initial  Unitholder
      to the Trustee for the purpose of settling the Trust;

      Short Term Investments means:

      (a)   obligations  issued or guaranteed by the government of Canada or any
            province of Canada or any agency or instrumentality thereof;

                                     - 5 -

<PAGE>

      (b)   term deposits,  guaranteed investment certificates,  certificates of
            deposit or bankers'  acceptances  of or  guaranteed  by any Canadian
            chartered bank or other financial institution (including the Trustee
            and any Affiliate of the Trustee) the short-term debt or deposits of
            which have been  rated at least A or the  equivalent  by  Standard &
            Poor's, Moody's Canada Inc. or Dominion Bond Rating Service Limited;
            and

      (c)   commercial  paper rated at least A or the  equivalent  by Standard &
            Poor's or Dominion Bond Rating Service Limited,

      in each case  maturing  within  180 days  after  the date of  acquisition;
      provided  that an  investment of the type referred to in Section 4.3 shall
      not be a Short Term Investment;

      Special Resolution has the meaning set forth in Section 11.7;

      Special  Voting Unit means a voting right  created and issued by the Trust
      in conjunction with the issuance of Exchangeable Shares by the Corporation
      or an Affiliate of the Corporation for the purpose of allowing  holders of
      such Exchangeable Shares to vote at meetings of Unitholders and having the
      rights and subject to the limitations, restrictions and conditions set out
      in Section 3.10;

      Subsequent Investment has the meaning set forth in Section 4.1;

      Transfer  Agent  means the Trustee in its  capacity as transfer  agent and
      registrar  for the Units or such other company as may from time to time be
      appointed by the Trustee to act as transfer  agent and  registrar  for the
      Units  together  in  either  such case with any  sub-transfer  agent  duly
      appointed by the transfer agent;

      Trust means the trust created pursuant to this Declaration of Trust;

      Trust Expenses means all expenses incurred by the Trustee, the Corporation
      or any  third  party,  in each  case  for the  account  of the  Trust,  in
      connection with this Declaration of Trust, the  establishment  and ongoing
      management  of the  Trust and the  ongoing  administration  of the  Units,
      including  those amounts  borrowed by the Trust which the  Corporation has
      elected  to  cause  the  Trust to repay or  which  the  Trust  has  become
      obligated to repay but excluding (a) Issue Expenses,  and (b) any expenses
      which are Production Costs (as defined in the Royalty Agreement);

      Trust Fund means, at any time, such of the following assets as are at such
      time  held by the  Trustee  for  the  purposes  of the  Trust  under  this
      Declaration of Trust:

      (a)   the Settled Amount;

                                     - 6 -

<PAGE>

      (b)   all funds realized from the sale of Units;

      (c)   any Short Term  Investments  in which funds may from time to time be
            invested;

      (d)   the Royalty;

      (e)   any Subsequent Investment;

      (f)   the proceeds of disposition of any of the foregoing assets; and

      (g)   all income,  interest,  profit,  gains and accretions and additional
            assets, rights and benefits of any kind or nature whatsoever arising
            directly or  indirectly  from or in  connection  with or accruing to
            such assets; and

      (h)   the  Trust's  rights  in  the  Material   Contracts  and  any  other
            agreements forming part of the Trust's assets;

      Trustee means Montreal Trust Company of Canada from August 2, 1996 to July
      19,  1999,  The Trust  Company of Bank of  Montreal  from July 19, 1999 to
      October 26, 2001 and Computershare Trust Company of Canada in its capacity
      as  trustee of the Trust or its  successor  or  successors  for the period
      commencing on October 26, 2001 and ending on the date Computershare  Trust
      Company of Canada  resigns or is  replaced  in  accordance  with the terms
      hereof;

      Underwriters' Fees means the amount designated as underwriters' fees in an
      Underwriting Agreement;

      Underwriting Agreement means any underwriting, agency or similar agreement
      entered into by the Trust and  investment  dealers and such other Persons,
      as may be party thereto, relating to an Offering;

      Unit means a unit of the Trust  created and issued  hereunder  and for the
      time being Outstanding and entitled to the benefits hereof,  provided that
      the term "Unit" shall not include the Special  Voting Units except for the
      purpose  of the  definition  of  "Unitholder"  (but  only for the  limited
      purposes specified therein),  and where the term "Unit" is used in Article
      11,  "Unit" shall  include those units of the Trust which are at such time
      issuable upon the exchange of all Exchangeable Shares then outstanding for
      the  purposes  of  determining  the  number  of  Units  outstanding  at  a
      particular  time, the number of votes to which a particular  Unitholder is
      entitled, and whether or not specified voting thresholds are attained;

      Unitholders  means the holders from time to time of one or more Units and,
      for the purposes of Sections 10.1, 15.2,  17.1, 17.2 and 18.3,  Article 11
      and the

                                     - 7 -

<PAGE>

      definition of "Ordinary Resolution" contained herein only, Unitholders
      shall also include the holders from time to time of one or more Special
      Voting Units; and

      Year means, initially, the period commencing on August 2, 1996 and ending
      on December 31, 1996, and thereafter means a calendar year.

1.2   Meaning of "Outstanding"

      Every Unit created and issued  hereunder shall be deemed to be Outstanding
until it shall be  cancelled  or  delivered  to the  Trustee  for  cancellation,
provided that:

      (a)   when  a new  Certificate  has  been  issued  in  substitution  for a
            Certificate  which has been lost,  stolen,  destroyed or  mutilated,
            only the Units  represented by the new Certificate  shall be counted
            for the purpose of determining the number of Units Outstanding; and

      (b)   for the purpose (and only for such limited purpose) of any provision
            of this  Declaration  of Trust or any  Material  Contract  entitling
            holders of Outstanding Units to vote, sign consents, requisitions or
            other instruments or take any other action under this Declaration of
            Trust or any Material Contract,  Units owned directly or indirectly,
            legally or equitably,  by the  Corporation or any Affiliate  thereof
            shall be  disregarded,  except that for the  purpose of  determining
            whether the Trustee  shall be protected in relying on any such vote,
            consent,  requisition or other instrument or action,  only the Units
            which the Trustee knows are so owned shall be so disregarded.

1.3   Headings

      The division of this Declaration of Trust into Articles and Sections,  the
provision  of a  table  of  contents,  and the  insertion  of  headings  are for
convenience  of  reference  only  and  shall  not  affect  the  construction  or
interpretation of this Declaration of Trust.

1.4   Construction of Terms

      In this Declaration of Trust,  words importing the singular number include
the plural  and vice  versa;  words  importing  gender  include  the  masculine,
feminine and neuter genders;  references to dollar amounts refer to such amounts
in Canadian  currency;  references  to "this  Declaration  of Trust",  "hereto",
"herein", "hereof", "hereby",  "hereunder" and similar expressions refer to this
Declaration  of  Trust,  and not to any  particular  Article,  Section  or other
portion hereof,  and include any and every instrument  supplemental or ancillary
hereto or in implementation  hereof; and the expressions "Article" and "Section"
followed by a number, letter, or combination of numbers and letters refer to the
specified Article or Section of this Declaration of Trust.

                                     - 8 -

<PAGE>

1.5   References to Acts Performed by the Trust

      Any  reference in this  Declaration  of Trust to an act to be performed by
the Trust shall be  construed  and applied for all purposes as if it referred to
an act to be  performed  by the Trustee on behalf of the Trust or, to the extent
applicable, by the Corporation on behalf of the Trust pursuant to the Management
Agreement.

1.6   Proposed Amendments to the Income Tax Act

      For the purposes of applying the provisions of this  Declaration of Trust,
where there are  proposals  for  amendments to the Income Tax Act which have not
been enacted into law or proclaimed into force by their proposed effective date,
the Trustees may take such proposals into consideration and apply the provisions
hereof as if such  proposed  amendments  had already  been  enacted into law and
proclaimed into force.

                                    ARTICLE 2
                                    THE TRUST

2.1   Settlement of Trust

      The  Initial   Unitholder  paid  concurrent  with  the  execution  of  the
Declaration  of Trust,  the  Settled  Amount to the  Trustee  for the purpose of
settling the Trust,  and the Trustee  confirms  that it has received the Settled
Amount and the  Initial  Unitholder  was issued one initial  Unit (the  "Initial
Unit") in the Trust.

2.2   Declaration of Trust

      The Trustee  hereby  agrees and  declares  that it holds the Trust Fund in
trust for the use and benefit of the Unitholders  upon the trusts and subject to
the terms and conditions set forth in this Declaration of Trust.

2.3   Name

      The name of the Trust shall be  "PrimeWest  Energy  Trust"  and,  whenever
lawful  and  convenient,  the  affairs  of the  Trust  shall  be  conducted  and
transacted  under that name. If the Trustee  determines that the use of the name
"PrimeWest  Energy Trust" is not practicable,  legal or convenient,  the Trustee
may use such other  designation or may adopt such other name for the Trust as it
deems  appropriate,  and thereafter  the Trust may conduct its activities  under
such other designation or name. Without limiting the foregoing,  the Trustee may
enter into  agreements and other  documents for and on behalf of the Trust under
the name  "PrimeWest  Energy  Trust" and the  Trustee  hereby  acknowledges  and
confirms  that any such  agreement  or other  document so entered into under the
name  "PrimeWest  Energy  Trust" shall for all purposes be and be deemed to have
been entered into by, and binding on, the Trustee,  as trustee for and on behalf
of the Trust.

                                     - 9 -

<PAGE>

2.4   Nature of the Trust

      The Trust is an open-end  unincorporated  investment trust established for
the purpose of purchasing and holding the Royalty.  The only  undertaking of the
Trust is and will be investing the funds of the Trust in the Royalty, Short Term
Investments and Subsequent Investments. The Trust is not, is not intended to be,
shall not be deemed to be, and shall not be  treated  as a general  partnership,
limited partnership,  syndicate, association, joint venture company, corporation
or joint stock company,  nor shall the Trustee or the Unitholders or any of them
or any  Person  be, or be deemed to be,  treated  in any way  whatsoever  as, or
liable or responsible  hereunder as,  partners or joint  venturers.  The Trustee
shall not be, or be deemed to be, an agent of the Unitholders.  The relationship
of the Unitholders to the Trustee shall be solely that of  beneficiaries  of the
Trust and their  rights  shall be limited to those  conferred  upon them by this
Declaration of Trust.

2.5   Rights of Unitholders

      No Unitholder or  Unitholders  shall be entitled to interfere with or give
any direction to the Trustee or the  Corporation  with respect to the affairs of
the Trust or in  connection  with the  exercise  of any  powers  or  authorities
conferred upon the Trustee or the Corporation under this Declaration of Trust or
the Management Agreement. The legal ownership of the assets of the Trust and the
right to conduct the affairs of the Trust (subject to the limitations  contained
herein) are vested exclusively in the Trustee, and the Unitholders shall have no
interest  therein  other  than  the  rights   specifically  set  forth  in  this
Declaration  of  Trust  and  shall  have no  right  to  compel  or call  for any
partition,  division,  dividend or  distribution of the Trust Fund or any of the
assets of the Trust except as specifically  provided herein.  The Units shall be
personal  property and shall  confer upon the holders  thereof only the interest
and rights  specifically  set forth in this  Declaration of Trust. No Unitholder
has or is  deemed  to have any right of  ownership  in any of the  assets of the
Trust.

2.6   Liability of Unitholders

      No Unitholder shall incur or be subject to any liability in contract or in
tort or of any other kind to any Person in connection with the Trust Fund or the
obligations  or the affairs of the Trust or with respect to any act performed by
the Trustee or by any other Person pursuant to this Declaration of Trust or with
respect  to any act or  omission  of the  Trustee  or any  other  Person  in the
performance  or  exercise,   or  purported   performance  or  exercise,  of  any
obligation,  power,  discretion or authority  conferred upon the Trustee or such
other Person  hereunder or with respect to any  transaction  entered into by the
Trustee or by any other Person  pursuant to this  Declaration  of Trust,  and no
Unitholder  shall be liable to  indemnify  the Trustee or any other  Person with
respect to any such liability or  liabilities  incurred by the Trustee or by any
such other Person or Persons or with  respect to any taxes  payable by the Trust
or by the Trustee or

                                     - 10 -

<PAGE>

any  other  Person  on  behalf of or in  connection  with the  Trust;  provided,
however, to the extent that,  notwithstanding the foregoing, any Unitholders are
held by a court of competent  jurisdiction  to be subject to any such liability,
such liability  shall be enforceable  only against,  and shall be satisfied only
out of, the Trust Fund.

2.7   Contracts of the Trust

      Every contract  entered into by or on behalf of the Trust,  whether by the
Trustee,  the  Corporation  or  otherwise,  shall  (except as the Trustee or the
Corporation  may otherwise  expressly agree in writing with respect to their own
personal liability) include a provision substantially to the following effect:

      The  parties  hereto  acknowledge  that  the  [Trustee]  [Corporation]  is
      entering  into this  agreement  solely [in its  capacity as  Trustee]  [on
      behalf] of the Trust and the  obligations of the Trust hereunder shall not
      be  personally  binding  upon the  [Trustee]  [Corporation]  or any of the
      Unitholders  of the Trust and that any  recourse  against the Trust [, the
      Trustee] [, the Corporation] or any Unitholder in any manner in respect of
      any  indebtedness,  obligation or liability of the Trust arising hereunder
      or  arising  in  connection  herewith  or from the  matters  to which this
      agreement  relates,  if any,  including without limitation claims based on
      negligence  or  otherwise  tortious  behaviour,  shall be limited  to, and
      satisfied  only out of, the Trust Fund as  defined in the  Declaration  of
      Trust dated August 2, 1996 and  restated  November 6, 2002 as amended from
      time to time.

      The omission of such a provision  from any such written  instrument  shall
not operate to impose  personal  liability  on the  Trustee,  the  Manager,  the
Corporation or any Unitholder.

2.8   Head Office of Trust

      The head  office of the Trust  shall be located at 4700,  150 - 6th Avenue
S.W.,  Calgary,  Alberta T2P 3Y7, or at such other place as the Trustee may from
time to time designate.

                                   ARTICLE 3
                                     UNITS

3.1   Designation and Number of Units

      The  beneficial  interests in the Trust shall be divided into interests of
one class,  described and  designated  as Units,  which shall be entitled to the
rights and subject to

                                     - 11 -

<PAGE>

the  limitations,  restrictions  and  conditions  set out herein.  The aggregate
number of Units which may be authorized and issued hereunder is unlimited.

3.2   Offerings of Units

      Units may be issued at the times,  to the persons,  for the  consideration
and  on the  terms  and  conditions  that  the  Corporation  determines.  Units,
including rights to acquire Units, may be offered pursuant to Offering Documents
or other  agreements or  arrangements  on such terms and  conditions and at such
time or times as the Corporation may determine.

3.3   Ranking of Units

      Each Unit represents an equal fractional  undivided beneficial interest in
the Trust  Fund.  All Units  Outstanding  from time to time shall be entitled to
equal shares in any  distributions by the Trust and, in the event of termination
of the  Trust,  in the net  assets of the  Trust.  All Units  shall  rank  among
themselves equally and rateably without  discrimination,  preference or priority
whatever may be the actual date or terms of issue thereof.

3.4   Units Non-Assessable

      Units shall be issued only when fully paid and the  Unitholders  shall not
thereafter  be  required  to make any  further  contribution  to the Trust  with
respect to such Units; provided however  notwithstanding the foregoing the Units
to be issued  under an  Offering  may be issued for a  consideration  payable in
instalments  and the Trust may take  security over such Units to be issued under
any such Offering as security for unpaid  instalments  and may assign all or any
part of its interests in that security.

3.5   No Conversion, Retraction, Redemption or Pre-Emptive Rights

      There are no  conversion,  retraction,  redemption or  pre-emptive  rights
attaching to the Units, other than as set forth herein.

3.6   No Fractional Units

      Fractions of Units shall not be issued.

3.7   Transferability of Units

      The Units are transferable.

3.8   Non-Resident Unitholders

      At no time may more  than  one-half  of the  Outstanding  Units be held by
non-residents of Canada  ("non-residents")  within the meaning of the Income Tax
Act. If

                                     - 12 -

<PAGE>

at any time the Trustee becomes aware, as a result of requiring  declarations as
to beneficial  ownership  under Section 8.11 or otherwise,  that the  beneficial
owners of 49% of the Units then  Outstanding are or may be non-residents or that
such a situation is imminent, the Trustee may make a public announcement thereof
and shall  not  accept a  subscription  for Units  from or issue or  register  a
transfer of Units to a Person unless the Person provides a declaration  pursuant
to Section 8.11 that the Person is not a non-resident.  If,  notwithstanding the
foregoing,  the  Trustee  determines  that a  majority  of the Units are held by
non-residents,  the Trustee may send a notice to non-resident  holders of Units,
chosen in inverse order to the order of acquisition or  registration  or in such
other manner as the Trustee may consider  equitable and  practicable,  requiring
them to sell their  Units or a  specified  portion  thereof  within a  specified
period of not less than 60 days. If the  Unitholders  receiving such notice have
not within  such  period  sold the  specified  number of Units or  provided  the
Trustee with satisfactory evidence that they are not non-residents,  the Trustee
may on behalf of such  Unitholders  sell such Units and, in the  interim,  shall
suspend the voting and  distribution  rights  attached  to such Units.  Any sale
shall be made on any stock exchange on which the Units are then listed and, upon
such sale,  the  affected  holders  shall cease to be holders of Units and their
rights shall be limited to receiving the net proceeds of sale upon  surrender of
the Certificates representing such Units.

3.9   Re-Purchase of Initial Unit by Trust

      Immediately after the closing of the Initial Offering, the Trust purchased
the Initial Unit from the Initial  Unitholder,  and the Initial  Unitholder sold
the  Initial  Unit to the Trust for a  purchase  price of  $100.00  and,  on the
completion of that  purchase and sale,  the Initial Unit was cancelled and is no
longer outstanding for any of the purposes of this Declaration of Trust.

3.10  Special Voting Units

      In  addition  to Units,  the Trust is hereby  empowered  to issue  Special
Voting Units having the rights and subject to the limitations,  restrictions and
conditions  set forth  herein.  The number of Special  Voting  Units that may be
issued shall be unlimited.

      Subject to the proviso that Special Voting Units may only be issued by the
Trust in conjunction with the issuance by the Corporation or an Affiliate of the
Corporation of  Exchangeable  Shares,  Special Voting Units may be issued at the
times,  to the persons,  for the  consideration  and on the terms and conditions
that the Corporation may determine.

      Each Special  Voting Unit shall  entitle the holder  thereof to attend and
vote at all meetings of  Unitholders.  The maximum  number of votes  attached to
each  Special  Voting  Unit  shall  be that  number  of  Units  into  which  the
Exchangeable  Shares issued in  conjunction  with the Special Voting Unit and at
that time outstanding are then  exchangeable.  Special Voting Units may be voted
by proxy on all matters that may

                                     - 13 -

<PAGE>

properly come before the Unitholders of the Trust. Prior to delivering a Special
Voting Unit proxy,  the holder of a Special  Voting Unit shall be  obligated  to
determine,  in a manner  approved  by the  Corporation,  the manner in which the
holders  of the  then  outstanding  Exchangeable  Shares  that  were  issued  in
conjunction  with that Special  Voting Unit would vote on each matter put before
the  Unitholders.  The holder of the Special Voting Unit would then be obligated
to complete  the Special  Voting Unit proxy and record as votes in favour of the
matter  that  number  of votes  equal to the  number  of Units  into  which  the
Exchangeable  Shares  which voted in favour of the matter are then  exchangeable
and record as votes  against the matter that number of votes equal to the number
of Units into which the  Exchangeable  Shares which voted against the matter are
then exchangeable. Votes attached to the Special Voting Unit may only be counted
to the extent of the number of Units into which the  Exchangeable  Shares issued
in connection with the Special Voting Unit and then  outstanding have recorded a
vote on the matter.

      Special  Voting  Units shall have the rights  granted  above in respect of
voting at meetings of Unitholders and shall have no other rights in the Trust or
the Trust Fund and for greater certainty Special Voting Units do not represent a
beneficial interest in the Trust.

                                   ARTICLE 4
                          INVESTMENT OF THE TRUST FUND

4.1   Investments

      Any funds within the Trust Fund,  including  the Net Proceeds of Offerings
and any funds  borrowed by the Trust shall be used by the Trust only to make the
Deferred  Purchase Price  Obligation,  to acquire other  royalties in respect of
Properties,  investing  in any other  securities  (including  securities  of the
Corporation or any affiliate of the  Corporation)  of an issuer which carries on
or intends to carry on the business of the acquisition, ownership or development
of petroleum or natural gas properties, royalties or securities relating thereto
or in any other property comprising or relating to the petroleum and natural gas
business approved by the Corporation or, subject to compliance with Section 4.3,
to  make  loan   advances   to  the   Corporation   (collectively,   "Subsequent
Investments"),  and to pay costs,  fees and  expenses  associated  therewith  or
incidental thereto.

4.2   Short Term Investments

      Any funds  within the Trust Fund that are not  required  to be invested as
provided  in Section  4.1 shall be used by the Trust only to acquire  Short Term
Investments or as permitted by Section 8.2(f)  pending making  distributions  to
the Unitholders.

                                     - 14 -

<PAGE>

4.3   Other Investment Restrictions

      Without in any manner  qualifying or limiting the restrictions  imposed by
Sections  4.1 and 4.2,  under no  circumstances  shall  the  Trust  acquire  any
investment which:

      (a)   would  result in the Units  becoming  "foreign  property" as defined
            under  the  provisions  of the  Income  Tax  Act at  the  time  such
            investment was acquired; or

      (b)   would result in the Trust not being considered either a "unit trust"
            or a "mutual  fund trust" for  purposes of the Income Tax Act at the
            time such investment was acquired.

                                    ARTICLE 5
                                  DISTRIBUTIONS

5.1   Distributions

      The  first  Distribution  Date of the Trust  shall be  January  15,  1997.
Commencing  January 15, 1997 the Trustee shall,  subject to Section 5.2, on each
Distribution Date cause the  Distributable  Income of the Trust to be determined
in respect of the immediately  preceding  Record Date and shall,  subject to any
limitations  contained in any Offering  Document,  distribute all  Distributable
Income to Unitholders  of record as at the close of business on the  immediately
preceding  Record Date in accordance  with the Pro Rata Share of each Unitholder
on that Record Date  (provided  that the Trustee may deduct or withhold  amounts
required by law from any Unitholder's distributions). Each Unitholder shall have
the right to enforce  the  payment of its share of  Distributable  Income on any
Distribution Date.

5.2   Change of Distribution Date

      The Trustee may change the Distribution Dates or any of them at any time
after October 15, 1997, subject to having given the Unitholders not less than 60
days' prior written notice, and may change the Record Date for any distribution
upon compliance with any requirements of applicable law or the rules of any
stock exchange.

5.3   Net Income for Income Tax Purposes to Become Payable

      On December 31 of each fiscal  year,  an amount equal to the net income of
the Trust for such fiscal year determined in accordance with the Income Tax Act,
other than  subsection  104(6)  thereof,  to the extent  not  otherwise  payable
pursuant  to  Section  5.1 on any  Record  Date in the  fiscal  year  (including
December  31 of that  fiscal  year) or deemed  to have  become  payable  for the
purposes of such Act  pursuant  to  subsection  104(29)  thereof,  shall  become
payable to  Unitholders  and a Unitholder  shall be entitled to

                                     - 15 -

<PAGE>

enforce  payment thereof on that day. Each  Unitholder's  share thereof shall be
equal to the Pro Rata Share of such Unitholder.  Notwithstanding  the foregoing,
the amount of any  Distributable  Income of the Trust so determined for a fiscal
year that is  determined  by the  Trustee to be  required  to be retained by the
Trust in order to pay any tax  liability  of the Trust in respect of that or any
prior fiscal year shall not be payable by the Trust to Unitholders.

5.4   Payment of Amounts Payable

      Where any amount becomes  payable to a Unitholder  under Section 5.3, such
amount shall be paid to the Unitholder on the next  Distribution Date unless any
Unitholder  requests payment thereof prior to that  Distribution  Date, in which
case the  amount  shall be paid to each  Unitholder  to whom it  became  payable
forthwith.

5.5   Reinvestment of Distributions

      (a)   Subject to receipt of all regulatory approvals, the Trust shall make
            available to Unitholders the  opportunity to reinvest  distributions
            from  the  Trust  in  additional   Units  by   participating   in  a
            distribution  reinvestment  plan  (the  "Plan").  Upon a  Unitholder
            electing  to be  enrolled in the Plan,  all  distributions  from the
            Trust will  automatically be reinvested on such Unitholder's  behalf
            pursuant to the Plan until such Unitholder  terminates his enrolment
            in the Plan or the Trust terminates the Plan.

      (b)   Distributions  due to  participants  in the Plan will be paid to the
            Trustee in its  capacity as agent under the Plan (the "Plan  Agent")
            and be applied to the  purchase of Units.  The Plan Agent shall make
            such purchases from the Trust at a discount to the prevailing market
            price of 5%.

      (c)   The  Plan  Agent  shall  furnish  to  each  participant  after  each
            distribution a report of the Units  purchased for the  participant's
            account in respect of such  distribution and the cumulative total of
            all Units purchased for that account. The Trust shall pay out of the
            Trust Fund the Plan  Agent's  charges  for  administering  the Plan.
            Certificates  representing  Units  purchased  under the Plan will be
            issued only upon request of the Unitholder,  upon termination of the
            Unitholder's  participation  in the Plan or upon  termination of the
            Plan.  Distributions  on  fractional  Units will be credited to each
            participant's account. However, no certificates for fractional Units
            will be issued.  A cash adjustment for any fractional Units shall be
            paid to such  Unitholders,  when  necessary,  by cheque or, with the
            concurrence of the Plan Agent,  as such  Unitholder  shall otherwise
            direct.

      (d)   Unitholders may terminate their participation in the Plan by written
            notice to the Plan Agent. Such notice, if actually received prior to
            a Distribution  Date,  will be given effect to on that  Distribution
            Date.

                                     - 16 -

<PAGE>

            Thereafter, distributions to such Unitholders will be by cheque. The
            Trust may terminate the Plan, in its sole discretion,  upon not less
            than 30 days' notice to the participants.

                                    ARTICLE 6
                               REDEMPTION OF UNITS

6.1   Right of Redemption

      Each  Unitholder  shall be  entitled to require the Trust to redeem at any
time or from time to time at the demand of the Unitholder all or any part of the
Units  registered  in the name of the  Unitholder at the prices  determined  and
payable in accordance with the conditions hereinafter provided.

6.2   Exercise of Redemption Right

      To exercise a Unitholder's  right to require redemption under this Article
6, a duly completed and properly  executed notice  requiring the Trust to redeem
Units,  in a form approved by the Trust,  shall be sent to the Trust at the head
office of the Trust, together with the Certificate or Certificates  representing
the Units to be redeemed.  No form or manner of completion or execution shall be
sufficient  unless the same is in all respects  satisfactory to the Trust and is
accompanied by any further  evidence that the Trust may reasonably  require with
respect to the identity, capacity or authority of the person giving such notice.

      Upon receipt by the Trust of the notice to redeem  Units,  the  Unitholder
shall thereafter cease to have any rights with respect to the Units tendered for
redemption (other than to receive the redemption payment therefor) including the
right to receive any  distributions  thereon  which are declared  payable to the
Unitholders  of record on a date which is  subsequent  to the date of receipt by
the  Trust  of such  notice.  Units  shall  be  considered  to be  tendered  for
redemption  on the date that the Trust has,  to the  satisfaction  of the Trust,
received the notice,  Certificates  and other required  documents or evidence as
aforesaid.

6.3   Cash Redemption

      Subject to Section 6.4,  upon receipt by the Trust of the notice to redeem
Units in  accordance  with  Section  6.2,  the holder of the Units  tendered for
redemption shall be entitled to receive a price per Unit (hereinafter called the
"Cash Redemption Price") equal to the lesser of:

      (a)   95% of the  market  price of the  Units on the  principal  market on
            which the Units are quoted  for  trading  during the 10 trading  day
            period

                                     - 17 -

<PAGE>

            commencing  immediately  after  the date on  which  the  Units  were
            tendered to the Trust for redemption; and

      (b)   the closing market price on the principal  market on which the Units
            are quoted for trading,  on the date that the Units were so tendered
            for redemption.

      For  purposes of  subsection  6.3(a),  the market price shall be an amount
equal to the simple  average of the  closing  price of the 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 Units traded on a  particular  day, the market
price shall be an amount  equal to the simple  average of the highest and lowest
prices for that trading day if there was a trade;  and provided  further that if
there was  trading on the  applicable  exchange or market for fewer than five of
the ten  trading  days,  the market  price  shall be the  simple  average of the
following  prices  established  for each of the ten trading days: the average of
the bid and ask prices for each day on which there was no trading;  the weighted
average  trading  price of the Units for each day that there was  trading if the
exchange or market provides a weighted average trading price; and the average of
the highest and lowest  prices of the Units for each day that there was trading,
if the market  provides  only the highest and lowest prices of Units traded on a
particular  day. For purposes of  subsection  6.3(b),  the closing  market price
shall be an amount equal to the closing  price of the Units if there was a trade
on the date;  an amount equal to the average of the highest and lowest prices of
Units if there was trading and the  exchange or other market  provides  only the
highest and lowest  prices of 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.

      The Cash  Redemption  Price  payable in respect of the Units  tendered for
redemption  during  any  month  shall be paid by  cheque,  drawn  on a  Canadian
chartered  bank or a trust company in lawful money of Canada,  payable at par to
or to the order of the  Unitholder  who exercised the right of redemption on the
last day of the  calendar  month  following  the month in which  the Units  were
tendered for redemption. Payments made by the Trust of the Cash Redemption Price
are  conclusively  deemed to have been  made upon the  mailing  of a cheque in a
postage prepaid envelope  addressed to the former  Unitholder unless such cheque
is  dishonoured  upon  presentment.  Upon  such  payment,  the  Trust  shall  be
discharged  from all liability to the former  Unitholder in respect of the Units
so redeemed.

6.4   No Cash Redemption in Certain Circumstances

      Section 6.3 shall not be applicable to Units  tendered for redemption by a
Unitholder, if:

      (a)   the total  amount  payable by the Trust  pursuant  to Section 6.3 in
            respect of such Units and all other Units tendered for redemption in
            the same

                                     - 18 -

<PAGE>

            calendar month exceeds $100,000 provided that the board of directors
            of  the  Corporation  may,  in  its  sole  discretion,   waive  such
            limitation in respect of any calendar month;

      (b)   at the time the Units are tendered for  redemption,  the outstanding
            Units are not listed for trading on the Toronto  Stock  Exchange and
            are not traded or quoted on any other stock exchange or market which
            the board of directors of the Corporation  considers,  in their sole
            discretion, provides representative fair market value prices for the
            Units; or

      (c)   the normal trading of the  outstanding  Units is suspended or halted
            on any stock  exchange on which the Units are listed for trading or,
            if not so  listed,  on any  market on which the Units are quoted for
            trading,  on the date that such Units tendered for  redemption  were
            tendered to the Trust for  redemption  or for more than five trading
            days during the ten day trading period commencing  immediately after
            the date on which such Units tendered for  redemption  were tendered
            to the Trust for redemption.

6.5   In Specie Redemption

      If,  pursuant  to Section  6.4,  Section  6.3 is not  applicable  to Units
tendered for redemption by a Unitholder,  such Unitholder shall,  instead of the
Cash Redemption  Price per Unit specified in Section 6.3, be entitled to receive
a price per Unit (hereinafter  called the "In Specie Redemption Price") equal to
the fair market  value  thereof as  determined  by the board of directors of the
Corporation and in making such  determination  there shall be deducted from such
price otherwise determined the amount of the tax liability incurred by the Trust
as a result of such redemption (the "Redemption Tax  Liability").  The In Specie
Redemption Price shall, subject to all necessary regulatory  approvals,  be paid
and satisfied by way of a distribution  in specie of the assets of the Trust. No
fractional  securities of the Trust shall be distributed and where the number of
any securities of the Trust to be received upon redemption by a Unitholder would
otherwise  include a fraction,  that number  shall be rounded to the next lowest
whole  number.  The In Specie  Redemption  Price  payable  in  respect  of Units
tendered for redemption during any month shall be paid by the transfer, to or to
the order of the Unitholder  who exercised the right of redemption,  on the last
day (the "Transfer Date") of the calendar month following the month in which the
Units were tendered for  redemption,  of the assets of the Trust,  determined as
aforesaid. The Fund shall be entitled to all interest paid or accrued and unpaid
on any  securities of the Trust being  transferred,  and to all dividends on any
securities of the Trust being  transferred  which have been declared and paid or
have  been  declared  payable  on or before  the  Transfer  Date and to  similar
treatment in respect of  distributions  paid or payable and unpaid in respect of
any other  securities of the Trust being  transferred.  Payments by the Trust of
the In Specie  Redemption Price are  conclusively  deemed to have been made upon
the mailing of the assets of the Trust being transferred by registered mail in a

                                     - 19 -

<PAGE>

postage prepaid envelope addressed to the former Unitholder.  Upon such payment,
the Trust shall be  discharged  from all  liability to the former  Unitholder in
respect of the Units so redeemed.

6.6   Cancellation of Certificates for all Redeemed Units

      All certificates  representing Units which are redeemed under this Article
6 shall be cancelled and such Units shall no longer be outstanding and shall not
be reissued.

6.7   Deemed Cancellation of Units Tendered into a Take-Over Bid

      Notwithstanding  any other  provisions of this Article 6, in the event any
person holding an option to purchase  Units granted  pursuant to an option plan,
compensation  arrangement or other similar arrangement  approved by the Trust or
Unitholders (as required by applicable law) exercises such option  following the
commencement  of a take-over bid (as defined in the  Securities  Act  (Alberta))
which is not exempt from the take-over bid  requirements  of the  Securities Act
(Alberta)  and the optionee  tenders the Units  received on the exercise of such
option  pursuant to the  take-over  bid, in the event any such Units so tendered
are not,  for any reason,  taken up and paid for by the Offeror  pursuant to the
take-over  bid then all such Units so  purchased  by the  optionee  shall be and
shall be deemed to be cancelled and returned to the Trust,  and the Trust,  upon
receiving a written  confirmation that all such Units have been transferred back
to the Trust,  shall refund to the optionee all consideration paid by him or her
in the initial  purchase of the Units,  excluding any commissions and other fees
paid in connection with such purchase.

                                    ARTICLE 7
               APPOINTMENT, RESIGNATION AND REMOVAL OF THE TRUSTEE

7.1   Trustee's Term of Office

      Subject to Sections 7.2 and 7.3,  Computershare Trust Company of Canada is
hereby  appointed as trustee under this Declaration of Trust for an initial term
of office which shall expire at the  conclusion  of the sixth annual  meeting of
Unitholders.  A decision to reappoint, or to appoint a successor to, the Trustee
shall be made at the sixth annual meeting of Unitholders  and thereafter at each
third  annual  meeting  of  Unitholders  following  the  meeting  at  which  any
reappointment  or  appointment is made.  Any such  reappointment  or appointment
shall be made either by an Ordinary Resolution at such meeting of Unitholders or
in the manner set out in Section  7.4.  Notwithstanding  the  foregoing,  if the
Trustee is not reappointed at the meeting of Unitholders held immediately before
the term of office of the Trustee  expires and if no successor to the Trustee is
appointed  at that  meeting,  the Trustee  shall  continue to hold the office of
trustee under this  Declaration  of Trust until a successor  has been  appointed
under Section 7.4.

                                     - 20 -

<PAGE>

7.2   Resignation of Trustee

      The Trustee may resign from the office of trustee  hereunder on giving not
less than 60 days' notice in writing to the Corporation, but no such resignation
shall be effective until:

      (a)   a new trustee has been  appointed in the place of the Trustee in the
            manner set out in Section 7.4; and

      (b)   the new trustee has accepted  such  appointment  and has legally and
            validly assumed all obligations of the Trustee related hereto.

7.3   Removal of Trustee

      The  Trustee  shall be  removed  by notice  in  writing  delivered  by the
Corporation  to the Trustee in the event that, at any time, the Trustee shall no
longer  satisfy  all of the  requirements  of Section  7.6 or shall be  declared
bankrupt or insolvent or shall enter into  liquidation,  whether  compulsory  or
voluntary,  and not being  merely a voluntary  liquidation  for the  purposes of
amalgamation or reconstruction,  or if the assets of the Trustee shall otherwise
become  liable  to  seizure  or  confiscation  by  any  public  or  governmental
authority,  or if the Trustee shall otherwise  become incapable of performing or
shall fail in any material  respect to perform its  responsibilities  under this
Declaration of Trust, or as a result of a material  increase in the fees charged
by the Trustee.

      No notice to remove  the  Trustee  under  this  Section  7.3 shall  become
effective until:

      (a)   the  removal  of  the  Trustee  has  been  approved  by an  Ordinary
            Resolution at a meeting of Unitholders duly called for that purpose;

      (b)   a new trustee has been  appointed in the place of the Trustee in the
            manner set out in Section 7.4; and

      (c)   the new trustee has accepted  such  appointment  and has legally and
            validly assumed all obligations of the Trustee related hereto.

7.4   Appointment of Successor to Trustee

      A successor to a Trustee which has been removed under Section 7.3 or which
has given  notice of  resignation  under  Section 7.2 shall be  appointed  by an
Ordinary  Resolution  passed at a meeting of  Unitholders  duly  called for that
purpose, provided the successor meets the requirements of Section 7.6.

      Subject to Section  7.6,  the  Corporation  may appoint a successor to any
Trustee which has been removed  under  Section 7.3,  which has given a notice of
resignation

                                     - 21 -

<PAGE>

under Section 7.2, or which has not been  reappointed  under Section 7.1, if the
Unitholders fail to do so at the relevant meeting.

      No  appointment  of any successor  trustee  shall be effective  until such
successor  trustee has  accepted  such  appointment  and has legally and validly
assumed all of the obligations of the Trustee related hereto.

7.5   Failure to Appoint Successor

      In the event that no successor to a Trustee  which has  delivered a notice
of  resignation in accordance  with Section 7.2 or which has received  notice of
removal in  accordance  with Section 7.3 has accepted an  appointment  within 60
days after the receipt by the  Corporation  of the notice of  resignation  or 60
days after the receipt by the Trustee of the notice of removal, the Trustee, the
Corporation or any Unitholder may apply to a court of competent jurisdiction for
the appointment of a successor to the Trustee. The appointment of such successor
by such court shall not require the approval of Unitholders.

7.6   Qualifications of Trustee

      The Trustee and any successor to the Trustee or any new trustee  appointed
under  this  Article  7 shall be a  corporation  incorporated  under the laws of
Canada or of a  province  thereof  and  shall be a  resident  of Canada  for the
purposes of the Income Tax Act.  Such  corporation  must at all times when it is
the Trustee be registered  under the laws of the Province of Alberta to carry on
the  business  of a trust  corporation  and must have  undertaken  in writing to
discharge all of the obligations and  responsibilities of the Trustee under this
Declaration  of Trust.  With the exception of the initial  Trustee,  the Trustee
shall be a corporation which has reported in its audited consolidated  financial
statements for its most recent completed fiscal year shareholders'  equity of at
least $100 million or such other amount as the Board of Directors  shall approve
or be an Affiliate of such a corporation,  provided that all of the  obligations
of such Affiliate are unconditionally guaranteed by such a corporation.

                                    ARTICLE 8
                             CONCERNING THE TRUSTEE

8.1   Powers of the Trustee and the Corporation

      (a)   Subject to the terms and conditions of this Declaration of Trust and
            any  contracts  or  obligations  of the  Trust or the  Trustee,  the
            Trustee may exercise  from time to time in respect of the Trust Fund
            any and all rights, powers and privileges that could be exercised by
            a beneficial  owner thereof,  except as  specifically  designated in
            subsection (b) below.

                                     - 22 -

<PAGE>

      (b)   The  Corporation  may exercise from time to time any and all rights,
            powers and  privileges  in relation  to all matters  relating to the
            maximization of Unitholder  value in the context of a response to an
            offer for Trust Units or for all or substantially  all of the assets
            of the Trust or the Corporation or any subsidiary of the Corporation
            or the  Trust  (an  "Offer")  including  (i) any  Unitholder  rights
            protection  plan (or amendment or waiver thereof) either prior to or
            during the course of any Offer;  (ii) any  defensive  action  either
            prior to or during the course of any Offer; (iii) the preparation of
            any   "Directors'   Circular"   in  response  to  any  Offer;   (iv)
            consideration  on  behalf  of  Unitholders  and  recommendations  to
            Unitholders  in response to any Offer;  (v) any  regulatory or court
            action in respect of any related  matters;  and (vi) the carriage of
            all related and ancillary matters;  and the Corporation accepts such
            responsibility and agrees that, in respect of such matters, it shall
            carry  out its  functions  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  Person  would  exercise  in  comparable
            circumstances.   The  Corporation,  may,  and  if  directed  by  the
            Corporation in writing, the Trustee shall, execute any agreements on
            behalf of the Trust as the Corporation  shall have authorized within
            the scope of the exercise of any such rights, powers or privileges.

8.2   Specific Powers and Authorities

      Subject only to the express  provisions  contained in this  Declaration of
Trust,  the Material  Contracts,  and any other  contracts or obligations of the
Trust or of the  Trustee in respect of the Trust,  and in  addition to any other
powers  and  authorities  conferred  by this  Declaration  of Trust or which the
Trustee may have by virtue of any present or future  statute or rule of law, the
Trustee,  without  any  action or  consent  by the  Unitholders,  shall have the
following powers and authorities  which may be exercised by it from time to time
in its sole judgment and  discretion  and in such manner and upon such terms and
conditions  as it may from time to time deem proper,  provided that the exercise
of such powers and authorities does not adversely affect the status of the Trust
as a "unit  trust" and a "mutual  fund trust" for the purposes of the Income Tax
Act:

      (a)   to enter into,  perform and enforce the  Material  Contracts  of the
            Trust;

      (b)   to maintain records and provide reports to Unitholders;

      (c)   to effect payment of distributions to the Unitholders;

      (d)   to apply for ARTC;

                                     - 23 -

<PAGE>

      (e)   to cause the Trust,  to the extent of the Trust Fund,  to  indemnify
            the directors of the Corporation;

      (f)   to deposit funds of the Trust in interest-bearing  accounts in banks
            or trust  companies,  including  the Trustee or an  Affiliate of the
            Trustee,   whose  short  term  obligations   constitute  Short  Term
            Investments,  the same to be subject to withdrawal on such terms and
            in such manner and by such Person or Persons  (including  any one or
            more  officers,  agents  or  representatives)  as  the  Trustee  may
            determine;

      (g)   to possess  and  exercise  all the  rights,  powers  and  privileges
            pertaining  to the ownership of all or any part of the assets of the
            Trust, to the same extent that an individual might, unless otherwise
            limited  herein,   and,  without  limiting  the  generality  of  the
            foregoing, to vote or give any consent,  request or notice, or waive
            any notice, either in person or by proxy or power of attorney,  with
            or without  power of  substitution,  to one or more  Persons,  which
            proxies  and  powers of  attorney  may be for  meetings  or  actions
            generally  or for any  particular  meeting or action and may include
            the exercise of discretionary power;

      (h)   when reasonably required, to engage or employ any Persons as agents,
            representatives,  employees or independent  contractors  (including,
            without limitation,  investment advisers, registrars,  underwriters,
            accountants,  lawyers,  appraisers,  brokers or otherwise) in one or
            more capacities;

      (i)   to collect,  sue for and receive all sums of money coming due to the
            Trust,  and to engage in,  intervene in,  prosecute,  join,  defend,
            compromise,  abandon or adjust,  by  arbitration  or otherwise,  any
            actions,  suits,  proceedings,  disputes,  claims,  demands or other
            litigation  relating  to the  Trust,  the assets of the Trust or the
            Trust's affairs, to enter into agreements  therefor,  whether or not
            any suit is commenced or claim  accrued or asserted  and, in advance
            of  any  controversy,   to  enter  into  agreements   regarding  the
            arbitration, adjudication or settlement thereof;

      (j)   to arrange for insurance  contracts and policies insuring the assets
            of the Trust against any and all risks and insuring the Trust and/or
            any or all of the  Trustee or the  Unitholders  against  any and all
            claims and  liabilities of any nature asserted by any Person arising
            by reason of any action alleged to have been taken or omitted by the
            Trust or by the Trustee or Unitholders;

      (k)   to cause legal title to any of the assets of the Trust to be held by
            and/or in the name of the Trustee or,  except as  prohibited by law,
            by and/or in the name of the Trust or any other custodian or Person,
            on such terms, in such

                                     - 24 -

<PAGE>

            manner, with such powers in such person as the Trustee may determine
            and with or  without  disclosure  that the Trust or the  Trustee  is
            interested therein,  provided however that should legal title to any
            of the Trust's assets be held by and/or in the name of any Person or
            Persons  other  than the  Trustee or the Trust,  the  Trustee  shall
            require  such  Person  or  Persons  to  execute  a  trust  agreement
            acknowledging  that legal title to those assets is held in trust for
            the benefit of the Trust;

      (l)   to accept,  hold,  renew or extend or participate in the acceptance,
            holding, renewal or extension of any security upon such terms as may
            be  deemed  advisable,  and to agree to a  reduction  in the rate of
            interest on any security or to any other  modification  or change in
            the terms of any security or of any guarantee pertaining thereto, in
            any manner and to any extent  that it may deem  advisable;  to waive
            any default in the  performance  of any covenant or condition of any
            security or in the  performance of any guarantee,  or to enforce the
            rights in  respect of any such  default  in such  manner and to such
            extent as it may deem advisable; to exercise and enforce any and all
            rights of foreclosure, to bid on property on sale or foreclosure, to
            take a conveyance in lieu of  foreclosure  with or without  paying a
            consideration  therefor and in  connection  therewith to relieve the
            obligation on the covenants secured by such security and to exercise
            and enforce in any action,  suit or  proceeding  at law or in equity
            any  rights  or  remedies  with  respect  to any  such  security  or
            guarantee;

      (m)   to  make,  execute,  acknowledge  and  deliver  any and  all  deeds,
            contracts,  waivers, releases or other documents of transfer and any
            and all other  instruments  in writing  necessary  or proper for the
            accomplishment of any of the powers herein granted;

      (n)   to pay out of the Trust Fund the Trust Expenses;

      (o)   except  as  prohibited  by  law,  to  delegate  any  or  all  of the
            management  and  administrative  powers and duties of the Trustee to
            the  Corporation  or  any  one  or  more  agents,   representatives,
            officers,  employees,   independent  contractors  or  other  Persons
            without  liability  to  the  Trustee  except  as  provided  in  this
            Declaration of Trust;

      (p)   to borrow  and  repay  funds  and  incur  and pay  indebtedness  and
            guarantee the  indebtedness of the  Corporation and assign,  charge,
            pledge,  hypothecate,  grant a security  interest  in,  mortgage and
            encumber  the  Trust  Fund as  security  for  such  borrowed  funds,
            indebtedness or guarantee;

                                     - 25 -

<PAGE>

      (q)   to do all  such  other  acts and  things  as are  incidental  to the
            foregoing,  and to exercise all powers which are necessary or useful
            to  carry  on the  business  of the  Trust,  to  promote  any of the
            purposes  for  which  the  Trust  is  formed  and to  carry  out the
            provisions of this Declaration of Trust;

      (r)   to issue  additional  Units  from  time to time in  accordance  with
            Offering Documents,  this Declaration of Trust or as directed by the
            Corporation;

      (s)   to use reasonable efforts to ensure that the Trust complies with the
            requirements of sections 108(2)(b) and 132(6) of the Income Tax Act,
            as from time to time amended or replaced; and

      (t)   without  limiting any of the  provisions  hereof,  to pay out of the
            Trust Fund:

            (i)   Underwriters' Fees;

            (ii)  the purchase price of the Royalty,  Short Term Investments and
                  Subsequent Investments;

            (iii) the Deferred Purchase Price Obligation;

            (iv)  Issue Expenses; and

            (v)   all structuring fees;

            all as contemplated by the Offering  Documents,  this Declaration of
            Trust or the Material Contracts.

8.3   Banking

      The  banking  activities  of the  Trust,  or any  part  thereof,  shall be
transacted with such bank,  trust company or other firm or corporation  carrying
on a banking business  (including the Trustee or an Affiliate of the Trustee) as
the Trustee may designate,  appoint or authorize from time to time, and all such
banking  activities,  or any part  thereof,  shall be  transacted on the Trust's
behalf by such one or more  officers of the Trustee or other Persons (who may be
officers or employees of the Corporation) as the Trustee may designate,  appoint
or authorize from time to time.

8.4   Standard of Care

      Except as otherwise  provided  herein,  the Trustee  shall comply with any
agreements  contemplated hereby which may be binding on the Trustee or the Trust
and shall  exercise its powers and carry out its functions  hereunder 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

                                     - 26 -

<PAGE>

prudent  trustee would exercise in comparable  circumstances.  Unless  otherwise
required  by law,  the Trustee  shall not be  required  to give bond,  surety or
security in any  jurisdiction  for the  performance of any duties or obligations
hereunder.  The Trustee,  in its  capacity as trustee,  shall not be required to
devote its entire time to the affairs of the Trust.

8.5   Fees and Expenses

      The Trustee  shall be paid by the  Corporation  such fees as may be agreed
upon in writing from time to time by the Corporation and the Trustee, and if any
such  fees are not  paid by the  Corporation  within  30 days of the date of any
invoice in respect thereof, the Trustee shall be entitled to have such fees paid
out of the Trust Fund. As part of Trust  Expenses,  the Trustee may pay or cause
to be paid reasonable fees,  costs and expenses  incurred in connection with the
administration and management of the Trust, including fees of auditors, lawyers,
appraisers and other agents,  consultants and professional  advisers employed by
or on  behalf  of the  Trust and the cost of  reporting  or  giving  notices  to
Unitholders.  All costs,  charges and expenses (including any amounts payable to
the Trustee  under  Sections  8.7 and 8.8)  properly  incurred by the Trustee on
behalf of the Trust shall be payable by the Corporation,  and if any such costs,
charges and expenses are not paid by the Corporation  within 30 days of the date
of any invoice in respect  thereof,  the Trustee  shall be entitled to have such
costs, charges and expenses paid out of the Trust Fund. The Trustee shall have a
lien on the Trust Fund (which  shall have  priority  over the  interests  of the
Unitholders pursuant hereto) to enforce payment of the fees, costs, expenses and
other amounts payable or reimbursable by the Trust to the Trustee.

8.6   Limitations on Liability of Trustee

      The Trustee, its directors,  officers, employees,  shareholders and agents
shall not be liable to any Unitholder or any other Person, in tort,  contract or
otherwise,  in connection  with any matter  pertaining to the Trust or the Trust
Fund,  arising  from the exercise by the Trustee of any powers,  authorities  or
discretion  conferred  under  this  Declaration  of  Trust,  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 Trust Fund incurred by reason of the sale of any asset,  any  inaccuracy
in any  evaluation  provided  by the  Corporation  or  any  other  appropriately
qualified Person, any reliance on any such evaluation,  any action or failure to
act of the  Corporation  or any other Person to whom the Trustee  has,  with the
consent of the Corporation,  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 the  Corporation  to
perform its duties under or delegated to it under this  Declaration  of Trust or
any Material  Contract),  unless such liabilities  arise out of the Trustee's or
any such  director's,  officer's,  employee's,  shareholder's  or agent's  gross
negligence, wilful default or fraud. If the Trustee has

                                     - 27 -

<PAGE>

retained an appropriate  expert or adviser or Counsel with respect to any matter
connected  with its  duties  under  this  Declaration  of Trust or any  Material
Contract,  the  Trustee  may act or refuse  to act  based on the  advice of such
expert, adviser or 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  Counsel.  In the
exercise of the powers,  authorities  or discretion  conferred  upon the Trustee
under this Declaration of Trust, 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 Trust Fund.

8.7   Indemnification of Trustee

      The Trust  (to the  extent of the  Trust  Fund) is  liable  to,  and shall
indemnify  and save  harmless the Trustee and each of its  directors,  officers,
employees,  shareholders  and agents  and all of their  successors  and  assigns
(collectively, the "Indemnified Parties") in respect of:

      (a)   any  liability  and all costs,  charges and  expenses  sustained  or
            incurred  in  respect  of any  action,  suit or  proceeding  that is
            proposed or commenced against any Indemnified Party, as the case may
            be, for or in respect  of any act,  omission  or error in respect of
            the  Trust  and  the   Trustee's   execution   of  all   duties  and
            responsibilities   and  exercise  of  all  powers  and   authorities
            pertaining thereto; and

      (b)   all other costs, charges,  taxes,  penalties and interest in respect
            of unpaid taxes and all other expenses and liabilities  sustained or
            incurred  by  the  Trustee  in  respect  of  the  administration  or
            termination of the Trust;

unless  any of  the  foregoing  arises  out of  the  Indemnified  Party's  gross
negligence,  wilful  default  or fraud,  in which  case the  provisions  of this
Section 8.7 shall not apply.

8.8   Environmental Indemnity

      The Trust  (to the  extent of the  Trust  Fund) is  liable  to,  and shall
indemnify and save harmless,  the Indemnified Parties against any loss, expense,
claim, liability or asserted liability (including strict liability and costs and
expenses of abatement and remediation of spills or releases of contaminants  and
liabilities of the Indemnified Parties to third parties (including  governmental
agencies)  in  respect  of  bodily  injuries,  property  damage,  damage  to  or
impairment  of the  environment  or any other  injury or  damage  and  including
liabilities of the  Indemnified  Parties to third parties for the third parties'
foreseeable and unforeseeable consequential damages) incurred as a result of:

      (a)   the administration of the Trust created hereby; or

                                     - 28 -

<PAGE>

      (b)   the  exercise  or  performance  by  the  Trustee  of any  rights  or
            obligations hereunder or under any of the Material Contracts;

and which result from or relate, directly or indirectly, to:

      (c)   the  presence  or release or  threatened  presence or release of any
            contaminants,  by any means or for any  reason,  on or in respect of
            the  Properties,   whether  or  not  such  presence  or  release  or
            threatened  presence  or release of the  contaminants  was under the
            control, care or management of the Trust or the Corporation, or of a
            previous owner or operator of a Property;

      (d)   any contaminant present on or released from any property adjacent to
            or in the proximate area of the Properties;

      (e)   the breach or alleged breach of any federal, provincial or municipal
            environmental law, regulation,  by-law, order, rule or permit by the
            Trust or the Corporation or an owner or operator of a Property; or

      (f)   any  misrepresentation or omission of a known fact or condition made
            by the Corporation relating to any Property.

            For purposes of this Section 8.8, "liability" shall include:

            (i)   liability  of an  Indemnified  Party for costs and expenses of
                  abatement   and   remediation   of  spills  and   releases  of
                  contaminants;

            (ii)  liability  of  an  Indemnified  Party  to  a  third  party  to
                  reimburse the third party for bodily injuries, property damage
                  and other  injuries or damages which the third party  suffers,
                  including (to the extent,  if any, that the Indemnified  Party
                  is   liable    therefor)    foreseeable   and    unforeseeable
                  consequential damages suffered by the third party; and

            (iii) liability of the Indemnified Party for damage to or impairment
                  of the environment.

      Notwithstanding the foregoing,  the Trust shall not be liable to indemnify
an Indemnified  Party against any loss,  expense,  claim,  liability or asserted
liability to the extent such results from the gross  negligence,  wilful default
or fraud of the Indemnified Party.

8.9   Apparent Authority

      No Person dealing with the Trustee or with any officer,  employee or agent
of the Trustee shall be bound to make any inquiry concerning the validity of any
transaction

                                     - 29 -

<PAGE>

purported to be made by the Trustee or by such officer,  employee or agent or to
make any inquiry  concerning,  or be liable  for,  the  application  of money or
property  paid,  lent or  delivered to or on the order of the Trustee or of such
officer,  employee or agent.  Any Person  dealing with the Trustee in respect of
any matter pertaining to the Trust Fund and any right, title or interest therein
shall be entitled to rely on a certificate,  statutory declaration or resolution
executed or  certified  on behalf of the Trustee as to the  capacity,  power and
authority of any officer,  employee or any other Person to act for and on behalf
and in the name of the Trust.

8.10  Notice to Unitholders of Non-Eligibility for Deferred Income Plans

      If the Trustee  becomes  aware that the Units have ceased to be  qualified
investments  for  registered  retirement  savings plans,  registered  retirement
income funds and deferred  profit  sharing  plans (all within the meaning of the
Income  Tax  Act) or any of  such  plans,  the  Trustee  shall  give  notice  to
Unitholders at their latest address as shown on the register of Unitholders that
Units have ceased to be qualified  investments for such plans. The Trustee shall
not be  liable  to the  Trust  or to any  Unitholder  for any  costs,  expenses,
charges,  penalties  or taxes  imposed  upon a  Unitholder  as a result of or by
virtue  of  a  Unit  not  being  a  qualified  investment  for  any  such  plan,
notwithstanding  any  failure  or  omission  of the  Trustee  to have given such
notice, provided the Trustee has complied with Section 8.4.

8.11  Declaration as to Beneficial Owner

      The  Trustee  may  require  any  Unitholder  as shown on the  register  of
Unitholders to provide a declaration,  in form prescribed by the Trustee,  as to
the beneficial owner of Units registered in such Unitholder's name and as to the
jurisdiction in which such beneficial owner is resident.

8.12  Conditions Precedent to Trustee's Obligation to Act

      The  obligation of the Trustee to call any meeting  pursuant to Article 11
or to commence to wind up the affairs of the Trust  pursuant to Article 15 shall
be conditional upon the Corporation,  Unitholders or any other Person furnishing
sufficient  funds to commence or continue  such act,  action or  proceeding  and
furnishing an indemnity (to the extent sufficient funds for such purpose are not
available in the Trust Fund)  reasonably  satisfactory to the Trustee to protect
and  hold  harmless  the  Trustee  against  the  costs,  charges,  expenses  and
liabilities  to be  incurred  thereby  and any loss and  damage it may suffer by
reason  thereof,  and the  obligation of the Trustee to commence or continue any
other act,  action or proceeding  for the purpose of performing its duties under
this  Declaration  of Trust or  enforcing  the rights of the  Trustee and of the
Unitholders  shall, if required by notice in writing by the Trustee,  be subject
to the same  conditions  as to funding  and  indemnity.  None of the  provisions
contained in this  Declaration  of Trust shall  require the Trustee to expend or
risk its own funds or

                                     - 30 -

<PAGE>

otherwise incur  financial  liability in the performance of any of its duties or
in the  exercise  of any of its  rights or powers  unless it is  indemnified  as
aforesaid.

8.13  Survival of Indemnities

      The  indemnities  provided  in  Sections  8.7 and 8.8  shall  survive  the
termination  of this  Declaration  of Trust under  Article 15 and the removal or
resignation of the Trustee under Article 7.

8.14  Trustee May Have Other Interests

      Subject  to  applicable  securities  laws  and the  qualifications  of the
Trustee  provided in Section 7.6,  and without  affecting or limiting the duties
and  responsibilities  or the  limitations  and  indemnities  provided  in  this
Declaration of Trust, the Trustee is hereby expressly permitted to:

      (a)   be an  Associate  or an Affiliate of a Person from or to whom assets
            of the Trust have been or are to be purchased or sold;

      (b)   be, or be an Associate  or an  Affiliate  of, a Person with whom the
            Trust or the  Corporation  contracts  or  deals  or  which  supplies
            services to the Trust or the Corporation;

      (c)   acquire,  hold and  dispose  of,  either for its own  account or the
            accounts of its customers,  any assets not constituting  part of the
            Trust Fund,  even if such  assets are of a character  which could be
            held by the  Trust,  and  exercise  all  rights  of an owner of such
            assets as if it were not a trustee;

      (d)   carry on its  business as a trust  company in the usual course while
            it is the  Trustee,  including  the  rendering  of  trustee or other
            services to other trusts and other Persons for gain; and

      (e)   derive direct or indirect benefit,  profit or advantage from time to
            time as a result of  dealing  with the  Trust or the  relationships,
            matters,  contracts,  transactions,  affiliations or other interests
            stated in this Section 8.14 without being liable to the Trust or any
            Unitholder  for any such  direct  or  indirect  benefit,  profit  or
            advantage.

Subject to  applicable  laws,  none of the  relationships,  matters,  contracts,
transactions, affiliations or other interests permitted above shall be, or shall
be deemed to be or to create, a material conflict of interest with the Trustee's
duties hereunder.

8.15  Documents Held by Trustee

      Any securities,  documents of title or other  instruments  that may at any
time be held by the  Trustee  subject to the trusts  hereof may be placed in the
deposit vaults of

                                     - 31 -

<PAGE>

the Trustee or of any  chartered  bank in Canada,  including an Affiliate of the
Trustee, or deposited for safekeeping with any such bank.

8.16  Limitations on Borrowing

      The Trust will not borrow,  and will not permit the  Corporation or any of
their respective subsidiaries to borrow, any funds from any third party (whether
by way of direct cash advances,  requesting the issuance of bankers' acceptances
or letters of credit or  otherwise),  unless at the time of such  borrowings and
after giving effect to such borrowings:

      (a)   the aggregate amount of all third party borrowings on a consolidated
            basis  outstanding  are not greater than 40% of the Reserve Value of
            all of the oil and gas properties  (including  any properties  being
            acquired with such  borrowings)  owned by the Trust, the Corporation
            and their respective  subsidiaries (without duplication) plus 40% of
            the net asset value of all  non-reserve  based  assets at that time;
            and

      (b)   the Trust's bona fide  estimate of the Debt Service Costs which will
            accrue during the 12 month period  thereafter will not exceed 30% of
            the Trust's bona fide estimate of the aggregate of the following for
            such period:

            (i)   the Trust's consolidated cashflow; plus

            (ii)  the Trust's consolidated interest expense.

8.17  Credit Facilities Unaffected

      Notwithstanding the restrictions set out in Section 8.16:

      (a)   any  liability or obligation  of the Trust or the  Corporation  to a
            Lender in respect of a  borrowing  that  contravenes  the  borrowing
            limitations contained in Section 8.16 shall not be affected, reduced
            or impaired by such contravention; and

      (b)   the priority,  validity,  effectiveness  and  enforceability  of any
            security  interest  granted by the Trust or the  Corporation  to any
            Lender and which contravenes the borrowing  limitations contained in
            Section 8.16 shall not be affected,  prejudiced  or impaired by such
            contravention.

                                     - 32 -

<PAGE>

                       ARTICLE 9 MANAGEMENT OF THE TRUST

9.1   Delegation of Management

      Except as otherwise provided herein or as expressly prohibited by law, the
Trustee may grant or delegate to the  Corporation  such authority as the Trustee
may in its sole  discretion  deem  necessary  or  desirable to effect the actual
administration  of the duties of the Trustee  under this  Declaration  of Trust,
without  regard to whether such  authority  is normally  granted or delegated by
trustees.  The  Trustee  may  grant  broad  discretion  to  the  Corporation  to
administer  and manage the day-to-day  operations of the Trust,  to act as agent
for the Trust, to execute documents on behalf of the Trust and to make decisions
which  conform to general  policies and general  principles  set forth herein or
established  by the Trustee.  The  Corporation  shall have the powers and duties
expressly  provided for herein and in the  Management  Agreement,  including the
power to further delegate  administration of the Trust, provided that no further
delegation  shall be effective  until the  Corporation  shall have  notified the
Trustee of the name of the Person or Persons to whom such further  delegation is
made and the terms and conditions thereof. The Trustee may enter into a contract
with  the  Corporation  relating  to  the  Corporation's   authority,   term  of
appointment, compensation and any other matters deemed desirable by the Trustee.

9.2   Offerings

      The Trustee hereby delegates to the Corporation responsibility for any and
all matters relating to an Offering including:

      (a)   ensuring compliance with all applicable laws;

      (b)   all matters relating to the content of any Offering  Documents,  the
            accuracy of the disclosure  contained therein, and the certification
            thereof;

      (c)   all matters concerning the terms of the Material Contracts; and

      (d)   all matters concerning any Underwriting  Agreement providing for the
            sale of Units or rights to Units.

The  Corporation  accepts such  delegation  and agrees that,  in respect of such
matters,  it shall carry out its  functions  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 Person would exercise in comparable circumstances.  The Corporation may,
and if directed by the  Corporation  in writing the Trustee  shall,  execute any
agreements  on behalf  of the Trust as the  Corporation  shall  have  authorized
within the scope of any authority delegated to it hereunder.

                                     - 33 -

<PAGE>

9.3   Power of Attorney

      Without  limiting  any of the  other  provisions  of this  Article  9, the
Trustee hereby  irrevocably  delegates to the Corporation  from time to time the
full power and authority,  and irrevocably  constitutes the Corporation its true
and lawful  attorney in fact,  to sign on behalf of the Trust all  prospectuses,
annual information forms,  management proxy circulars,  other Offering Documents
and any  other  documents  ancillary  or  similar  thereto  or to  complete  the
transactions  contemplated  thereby  that are required to be signed by the Trust
from time to time.

9.4   Liability of Trustee

      The Trustee  shall have no  liability  or  responsibility  for any matters
delegated to the Corporation  hereunder or under any of the Material  Contracts,
and the  Trustee,  in relying  upon the  Corporation  and in  entering  into the
Material Contracts,  shall be deemed to have complied with its obligations under
Section 8.4 and shall be entitled  to the benefit of the  indemnity  provided in
Sections 8.7 and 8.8.

9.5   Performance of Obligations

      In the event that the  Corporation  is unable or  unwilling to perform its
obligations under the Management Agreement, the Trustee shall either perform all
obligations of the Corporation thereunder or shall be entitled to engage another
Person that is duly qualified to perform such obligations.

                                   ARTICLE 10
                                   AMENDMENT

10.1  Amendment

      Except as otherwise  specifically  provided herein, the provisions of this
Declaration  of Trust may only be amended by the Trustee with the consent of the
Unitholders  by  Special  Resolution;  provided  that  the  provisions  of  this
Declaration of Trust and the Material Contracts may be amended by the Trustee at
any time or times,  without the consent,  approval or ratification of any of the
Unitholders:

      (a)   prior to closing the Initial Offering; or

      (b)   at any time for the purpose of:

            (i)   ensuring that the Trust will comply with any  applicable  laws
                  or  requirements  of any  governmental  agency or authority of
                  Canada or of any province;

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<PAGE>

            (ii)  ensuring that the Trust will satisfy the provisions of each of
                  sections  108(2)(b)  and 132(6) of the Income Tax Act, as from
                  time to time amended or replaced;

            (iii) ensuring that such  additional  protection is provided for the
                  interests   of   Unitholders   as  the  Trustee  may  consider
                  expedient;

            (iv)  removing or curing any  conflicts or  inconsistencies  between
                  the provisions of this  Declaration of Trust, any supplemental
                  indenture or the Royalty  Agreement and any other agreement of
                  the Trust, any Offering Document 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 materially  prejudiced thereby;
                  and

            (v)   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 materially  prejudiced
                  thereby.

      Notwithstanding the foregoing, no amendment shall reduce the percentage of
votes  required  to be cast at a meeting of the  Unitholders  for the purpose of
amending  this  Section  10.1  without  the consent of the holders of all of the
Units then Outstanding.

10.2  Notification of Amendment

      As soon as shall be practicable after the making of any amendment pursuant
to this  Article 10, the  Trustee  shall  furnish  written  notification  of the
substance of such amendment to each Unitholder.

                                   ARTICLE 11
                             MEETINGS OF UNITHOLDERS

11.1  Meetings of Unitholders

      Annual  meetings  of the  Unitholders  shall  be  called  by the  Trustee,
commencing in 1997, on a day, at a time and at a place to be set by the Trustee.
The business  transacted at such meetings shall include the  transaction of such
business as Unitholders may be entitled to vote upon as provided in this Article
11, or as the Trustee may determine.  Special meetings of the Unitholders may be
called at any time by the Trustee  and shall be called by the  Trustee  upon the
written request of Unitholders holding in the aggregate not less than 20% of the
Units then  Outstanding,  such  request  specifying  the purpose or purposes for
which such meeting is to be called. Meetings of Unitholders shall be held in the
City of  Calgary,  or at such other place as

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<PAGE>

the Trustee shall designate. The chairman of any annual or special meeting shall
be a Person  designated  by the Trustee for the purpose of such  meeting  except
that, on the motion of any Unitholder,  any Person may be elected as chairman by
a majority of the votes cast at the meeting instead of such designated Person or
in the event that no Person shall be designated by the Trustee.

11.2  Notice of Meetings

      Notice of all meetings of Unitholders  shall be given by unregistered mail
postage prepaid addressed to each Unitholder at his registered  address,  mailed
at least 21 days and not more than 50 days before the meeting. Such notice shall
set out the time when, and the place where, such meeting is to be held and shall
specify  the  nature  of the  business  to be  transacted  at  such  meeting  in
sufficient  detail to permit a Unitholder to form a reasoned  judgment  thereon,
together  with the text of any special  resolution in  substantially  final form
proposed to be passed.  Any adjourned  meeting may be held as adjourned  without
further notice. The accidental  omission to give notice to or the non-receipt of
such notice by the Unitholders shall not invalidate any resolution passed at any
such meeting.

11.3  Quorum

      At any meeting of Unitholders,  subject as hereinafter  provided, a quorum
shall consist of two Persons  either  present in person or  represented by proxy
and representing in the aggregate not less than 5% of the Outstanding  Units. If
a quorum is not present at the appointed place on the date for which the meeting
is called  within  one-half  hour after the time  fixed for the  holding of such
meeting,  the meeting,  if convened on the requisition of Unitholders,  shall be
dissolved,  but in any other case it shall stand adjourned to such day being not
less than 14 days  later and to such place and time as may be  appointed  by the
chairman of the meeting.  If at such adjourned meeting a quorum as above defined
is not present,  the  Unitholders  present  either  personally or by proxy shall
constitute a quorum,  and any  business  may be brought  before or dealt with at
such an adjourned  meeting which might have been brought before or dealt with at
the original meeting in accordance with the notice calling the same.

11.4  Voting Rights of Unitholders

      Only  Unitholders  of record shall be entitled to vote and each Unit shall
entitle  the  holder  or  holders  of that  Unit to one vote at any  meeting  of
Unitholders. At any meeting of Unitholders, any holder of Units entitled to vote
thereat may vote by proxy and a proxy need not be a Unitholder, provided that no
proxy  shall be voted at any  meeting  unless it shall have been  placed on file
with the  Trustee,  or with such agent of the Trustee as the Trustee may direct,
for verification at least 24 hours prior to the commencement of such meeting. If
approved by the  Trustee,  proxies may be  solicited in the name of the Trustee.
When any Unit is held  jointly by several  Persons,  any one of

                                     - 36 -

<PAGE>

them may vote at any meeting in person or by proxy in respect of such Unit,  but
if more than one of them shall be present at such meeting in person or by proxy,
and such joint owners or their proxies so present  disagree as to any vote to be
cast,  the joint owner  present or  represented  whose name appears first in the
register  maintained  pursuant  to Section  12.5 shall be  entitled to cast such
vote.

11.5  Actions Requiring Ordinary Resolutions

      The following  actions by the Trustee or otherwise shall require the prior
approval of the  Unitholders by means of an Ordinary  Resolution and Unitholders
will be entitled to pass Ordinary  Resolutions  which will bind the Trustee with
respect to the following matters:

      (a)   appointing and removing the Trustee as provided for in Article 7;

      (b)   appointing  and removing the Auditors as provided for in Article 18;
            or

      (c)   appointing and removing Directors as provided for in Article 18.

11.6  Actions Requiring Special Resolutions

      The following  actions by the Trustee shall require the prior  approval of
the  Unitholders  by means  of a  Special  Resolution  and  Unitholders  will be
entitled to pass Special Resolutions which will bind the Trustee with respect to
the following matters:

      (a)   amending  this  Declaration  of Trust  other  than for the  purposes
            specified  in Section  10.1 and Section  16.1  (other  than  Section
            16.1(a));

      (b)   amending any of the Material  Contracts (other than any Underwriting
            Agreement) other than for the purposes specified in Section 10.1;

      (c)   subdividing or consolidating Units;

      (d)   terminating  and  winding-up  the Trust as  provided  for in Section
            15.2;

      (e)   appointing an inspector as provided for in Section 11.10;

      (f)   authorizing  dispositions by the Corporation of oil and gas reserves
            of the Corporation where the value of such reserves would constitute
            more than 25% of the  aggregate  of the present  worth of all of the
            estimated  pre-tax net cash flow from all of the proved reserves and
            50% of the estimated  pre-tax net cash flow from all of the probable
            reserves of the Corporation,  the Trust and their subsidiaries taken
            as a whole as shown in the most recent  engineering  report relating
            to such reserves;

                                     - 37 -

<PAGE>

      (g)   approving  any matter  required by the  provisions  of any  Material
            Agreement to be approved by Special Resolution; or

      (h)   selling or agreeing to sell the property of the Trust as an entirety
            or  substantially  as an  entirety  or  assigning,  transferring  or
            disposing  of the Royalty in its  entirety or  substantially  in its
            entirety.

      Except  with  respect  to the  matters  set out in  Section  11.5 and this
Section  11.6,  no action  taken by the  Unitholders  and no  resolution  of the
Unitholders  at any meeting shall in any way bind the Trustee.  Any action taken
or resolution  passed in respect of any matter at a meeting of Unitholders shall
be by Special  Resolution  unless the contrary is otherwise  expressly  provided
under any specific provision of this Declaration of Trust.

11.7  Meaning of "Special Resolution"

      The  expression  "Special  Resolution"  means a resolution  proposed to be
passed as a  special  resolution  at a  meeting  of  Unitholders  (including  an
adjourned meeting) duly convened for the purpose and held in accordance with the
provisions of this Declaration of Trust at which two or more holders of at least
5% of the aggregate  number of Units then  Outstanding  are present in person or
represented by proxy and passed by the  affirmative  votes of the holders of not
less than 66% of the Units  represented  at the meeting and voted on a poll upon
such resolution.

      Notwithstanding  Section 11.3, if, at any such meeting,  the holders of 5%
of the  aggregate  number  of Units  Outstanding  are not  present  in person or
represented  by proxy  within  one-half  hour after the time  appointed  for the
meeting,  then the meeting, if convened by or on the requisition of Unitholders,
shall be dissolved; but in any other case it shall stand adjourned to such date,
being not less than 21 nor more than 60 days  later,  and to such place and time
as may be appointed by the chairman.  Not less than ten days' prior notice shall
be given of the time and place of such adjourned  meeting in the manner provided
in Section  11.2.  Such  notice  shall state that at the  adjourned  meeting the
Unitholders present in person or represented by proxy shall form a quorum but it
shall not be  necessary  to set forth the  purposes  for which the  meeting  was
originally  called or any  other  particulars.  At the  adjourned  meeting,  the
Unitholders  present in person or represented by proxy shall constitute a quorum
and may transact the business for which the meeting was originally convened, and
a resolution proposed at such adjourned meeting and passed by the requisite vote
as  provided  in this  Section  11.7  shall be a Special  Resolution  within the
meaning of this Declaration of Trust,  notwithstanding  that the holders of less
than 5% of the aggregate  number of Units then outstanding are present in person
or represented by proxy at such adjourned meeting.

                                     - 38 -

<PAGE>

      Votes on any  Special  Resolution  shall  always be given on a poll and no
demand  for a poll on any  Special  Resolution  shall be  necessary.  No Special
Resolution changing or amending any provision hereof relating to or affecting:

      (a)   the  Trustee,  including  the  qualification,  powers,  authorities,
            appointment, removal or resignation thereof;

      (b)   the Royalty Agreement; or

      (c)   the provisions of Article 10, Article 11 or Article 15;

shall be effective prior to 60 days from the adoption thereof in accordance with
the provisions hereof.

11.8  Record Date for Voting

      For the purpose of determining the Unitholders who are entitled to receive
notice of and vote or act at any meeting or any adjournment thereof, the Trustee
may fix a date not more than 50 days and not less than 21 days prior to the date
of any  meeting  of  Unitholders  as a  record  date  for the  determination  of
Unitholders  entitled  to  receive  notice  of and vote at such  meeting  or any
adjournment  thereof,  and any  Unitholder  who was a Unitholder  at the time so
fixed  shall be entitled  to receive  notice of and vote at such  meeting or any
adjournment  thereof  even though he has since that time  disposed of his Units,
and no  Unitholder  becoming  such after that time shall be  entitled to receive
notice of or vote at such meeting or any adjournment  thereof. In the event that
the  Trustee  does not fix a record  date for any  meeting of  Unitholders,  the
record date for such meeting shall be the Business Day immediately preceding the
date upon which notice of the meeting is given as provided under Section 11.2.

11.9  Binding Effect of Resolutions

      Every  Ordinary   Resolution  and  every  Special   Resolution  passed  in
accordance  with the  provisions  of this  Declaration  of Trust at a meeting of
Unitholders  shall be binding upon all the  Unitholders,  whether  present at or
absent  from such  meeting,  and each  Unitholder  shall be bound to give effect
accordingly to every such Ordinary Resolution and Special Resolution.

11.10 Appointment of Inspector

      The Trustee shall call a meeting of Unitholders  upon the written  request
of  Unitholders  holding  in the  aggregate  not less than 20% of the Units then
outstanding  for the purpose of considering  the  appointment of an inspector to
investigate the performance by the Trustee of any of its  responsibilities.  The
inspector shall have such powers not  inconsistent  herewith as may be conferred
upon him at the meeting when

                                     - 39 -

<PAGE>

he is  appointed,  but in all  events  shall  not have any  powers to act in any
capacity as the Trustee  hereunder or in place or in stead of the Trustee in any
manner hereunder.

11.11 Solicitation of Proxies

      A Unitholder shall have the right to appoint a proxy to attend and act for
the Unitholder at any meeting of Unitholders.  The Trustee shall solicit proxies
from  Unitholders in connection with all meetings of Unitholders.  In connection
therewith, the Trustee shall comply, to the extent possible, with all provisions
of the Business  Corporations  Act  (Alberta) and the  requirements  of Canadian
securities legislation applicable to the solicitation of proxies.

11.12 No Breach

      Notwithstanding  any provision of this  Declaration of Trust,  Unitholders
shall have no power to effect any  amendment  hereto  which  would  require  the
Trustee to take any action or conduct the affairs of the Trust in a manner which
would  constitute  a breach or  default  by the Trust or the  Trustee  under any
agreement binding on or obligation of the Trust or the Trustee.

                                   ARTICLE 12
                CERTIFICATES, REGISTRATION AND TRANSFER OF UNITS

12.1  Nature of Units

      The nature of a Unit and the  relationship  of a Unitholder to the Trustee
and the  relationship  of one  Unitholder  to another is as described in Section
2.4. The  provisions of this Article 12 shall not in any way alter the nature of
Units or the  relationship  of a Unitholder to the Trustee and of one Unitholder
to another,  but are intended  only to facilitate  the issuance of  certificates
evidencing  the  ownership of Units and the  recording of all such  transactions
whether by the Trust,  securities  dealers,  stock  exchanges,  transfer agents,
registrars or other Persons.

12.2  Certificates

      Certificates shall,  subject to the provisions hereof, be substantially in
the form annexed  hereto as Schedule A or such other form as is authorized  from
time to time by the Corporation  for and on behalf of the Trustee.  Certificates
are  issuable  only  in  fully  registered  form.  The  definitive  form  of the
Certificates shall:

      (a)   be in both English and French languages;

      (b)   be dated as of the date of issue thereof; and

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<PAGE>

      (c)   contain such distinguishing letters and numbers as the Trustee shall
            prescribe.

      In the event that any provision of the Certificates in the French language
shall  be  susceptible  of  an  interpretation  different  from  the  equivalent
provision in the English language,  the  interpretation of such provision in the
English language shall be determinative.

12.3  Contents of Certificates

      Until otherwise determined by the Trustee,  each Certificate shall legibly
set forth on the face thereof, inter alia, the following:

      (a)   the name of the Trust and the words "a trust  created under the laws
            of the Province of Alberta by a Declaration of Trust dated August 2,
            1996 as  amended  and  restated  from time to time" or words of like
            effect;

      (b)   the  name of the  Person  to  whom  the  Certificate  is  issued  as
            Unitholder;

      (c)   the number of Units represented thereby;

      (d)   that the Units represented thereby are transferable;

      (e)   "The Trust Units represented by this certificate are issued upon the
            terms and subject to the conditions of a declaration of trust (which
            declaration of trust together with all  instruments  supplemental or
            ancillary  thereto  is herein  referred  to as the  "Declaration  of
            Trust")  dated August 2, 1996 as amended and  restated  from time to
            time,   between  PrimeWest  Energy  Inc.  (the   "Corporation")  and
            Computershare   Trust  Company  of  Canada  (the   "Trustee"),   the
            provisions  of which  Declaration  of  Trust  are  binding  upon all
            holders  of Trust  Units  (the  "Unitholders"),  and to all of which
            provisions  the holder of this  certificate,  by  acceptance of this
            certificate, assents" or words of like effect;

      (f)   "The Declaration of Trust provides that no Unitholder shall incur or
            be subject to any personal liability  whatsoever,  in tort, contract
            or  otherwise,  to any person in  connection  with the assets of the
            Trust or the obligations or the affairs of the Trust or with respect
            to any act performed by the Trustee or by any other person  pursuant
            to the  Declaration  of Trust,  and all persons shall look solely to
            the  assets of the Trust for  satisfaction  of claims of any  nature
            arising  out of or in  connection  therewith  and the  assets of the
            Trust only shall be subject to levy or  execution"  or words of like
            effect.

                                     - 41 -

<PAGE>

The Certificates may be engraved, printed or lithographed, or partly in one form
and partly in another, as the Trustee may determine.

12.4  Signing of Certificates

      Each  Certificate  shall bear an  identifying  serial  number and shall be
signed by the Corporation on behalf of the Trust and shall be countersigned  and
registered  by  the  Transfer  Agent.  Any  signature  by or on  behalf  of  the
Corporation appearing on a Certificate may be printed, lithographed or otherwise
mechanically reproduced thereon, and any Certificate so signed shall be as valid
as if it had been signed manually. Any Certificate so signed,  countersigned and
registered shall be valid  notwithstanding that one or more of the Persons whose
signature is printed,  lithographed or  mechanically  reproduced no longer holds
office  at the  date  of  issuance  of  such  Certificate.  Certificates  may be
engraved, printed or lithographed,  or partly in one form and partly in another,
as the Trustee may determine.

12.5  Register of Unitholders

      A register shall be maintained at the principal  corporate trust office of
the Transfer  Agent in the City of Calgary,  which  register  shall  contain the
names and addresses of the Unitholders,  the respective numbers of Units held by
them, the numbers of the Certificates  representing  such Units, and a record of
all transfers thereof. Branch transfer registers shall be maintained in the City
of Toronto and at such other  offices of the  Transfer  Agent as the Trustee may
from time to time designate.  Except in the case of the register  required to be
maintained at the City of Calgary,  the Trustee shall have the power at any time
to close any register of transfers and in that event shall  transfer the records
thereof to another existing register or to a new register.

      Only  Unitholders  whose  Units  are  recorded  in the  register  shall be
entitled  to  receive  distributions  or to  exercise  or enjoy  the  rights  of
Unitholders  hereunder.  The  Trustee  shall have the right to treat the Persons
registered  as  Unitholders  on the  register of the Trust as the owners of such
Units  for  all  purposes,   including,  without  limitation,   payment  of  any
distribution,  giving notice to Unitholders  and determining the right to attend
and vote at  meetings  of  Unitholders,  and the  Trustee  shall not be bound to
recognize any transfer,  pledge or other disposition of a Unit or any attempt to
transfer,  pledge or dispose of a Unit, or any beneficial  interest or equitable
or other right or claim with respect  thereto,  whether or not the Trustee shall
have actual or other notice thereof, until such Unit shall have been transferred
on the register of the Trust as herein provided.

      The register  and branch  transfer  registers  referred to in this Section
12.5 shall at all reasonable  times be open for  inspection by the  Unitholders,
the Corporation and the Trustee.

                                     - 42 -

<PAGE>

12.6  Transfer of Units

      Subject to the  provisions  of this  Article  12, the Units shall be fully
transferable  without charge as between Persons,  but no transfer of Units shall
be  effective  as against the  Trustee or shall be in any way  binding  upon the
Trustee  until the  transfer  has been  recorded  on the  register or one of the
branch  transfer  registers  maintained by the Transfer  Agent. No transfer of a
Unit shall be recognized unless such transfer is of a whole number of Units.

      Subject to the provisions of this Article 12, Units shall be  transferable
on the register or one of the branch transfer  registers only by the Unitholders
of  record   thereof  or  their   executors,   administrators   or  other  legal
representatives  or by their agents duly  authorized  in writing,  and only upon
delivery to the Trustee or to the Transfer  Agent of the  Certificate  therefor,
properly  endorsed or accompanied by a duly executed  instrument of transfer and
accompanied  by all necessary  transfer or other taxes imposed by law,  together
with  such  evidence  of the  genuineness  of such  endorsement,  execution  and
authorization  and other  matters as may  reasonably be required by the Trustee.
Upon such delivery the transfer shall be recorded on the register of Unitholders
and a new  Certificate  for the residue  thereof (if any) shall be issued to the
transferor.

      Any Person  becoming  entitled to any Units as a consequence of the death,
bankruptcy or  incompetence  of any  Unitholder or otherwise by operation of law
shall  be  recorded  as the  holder  of  such  Units  and  shall  receive  a new
Certificate  therefor  only upon  production  of  evidence  satisfactory  to the
Trustee  thereof and delivery of the existing  Certificate  to the Trustee,  and
until such record is made the  Unitholder of record shall  continue to be and be
deemed  to be the  holder  of such  Units for all  purposes  whether  or not the
Trustee shall have actual or other notice of such death or other event.

12.7  Units Held Jointly or in a Fiduciary Capacity

      The  Trustee  may treat  two or more  Persons  holding  any Units as joint
owners of the entire  interest  therein  unless  their  ownership  is  expressly
otherwise  recorded on the register of the Trust,  but no entry shall be made in
the  register  or on any  Certificate  that any  Person is in any  other  manner
entitled to any future,  limited or contingent interest in any Units;  provided,
however, that any Person recorded as a Unitholder may, subject to the provisions
hereinafter  contained,  be described in the register or on any Certificate as a
fiduciary of any kind and any customary words may be added to the description of
the  holder to  identify  the  nature  of such  fiduciary  relationship.  If any
Certificate  is registered in more than one name, the  distributions  in respect
thereof may be paid to the order of all such holders failing written instruction
from them to the contrary,  and such payment  shall be a valid  discharge to the
Trustee and any  Transfer  Agent.  In the case of the death of one of more joint
holders,  the  distributions in respect of any Units

                                     - 43 -

<PAGE>

may be paid to the survivor or survivors of such holders, and such payment shall
be a valid discharge to the Trustee and any Transfer Agent.

12.8  Performance of Trust

      The Trustee, the Unitholders and any director,  officer, employee or agent
of the Trustee  shall not be bound to be  responsible  for or otherwise  inquire
into or ensure the performance of any trust,  express,  implied or constructive,
or of any  charge,  pledge or  equity to which any of the Units or any  interest
therein are or may be subject,  or to ascertain or enquire  whether any transfer
of any such Units or interests therein by any such Unitholder or by his personal
representatives  is authorized by such trust,  charge,  pledge or equity,  or to
recognize  any  Person as having  any  interest  therein  except  for the Person
recorded as a Unitholder.

12.9  Lost Certificates

      In the event that any Certificate is lost, stolen, destroyed or mutilated,
the Trustee may authorize the issuance of a new  Certificate for the same number
of Units in lieu thereof. The Trustee may in its discretion, before the issuance
of such new  Certificate,  require the owner of the lost,  stolen,  destroyed or
mutilated  Certificate,  or the legal  representative  of the owner,  to make an
affidavit  or  statutory  declaration  setting  forth such facts as to the loss,
theft, destruction or mutilation as the Trustee may deem necessary, to surrender
any  mutilated  Certificate,  and to supply to the  Trustee a "lost  certificate
bond"  or a  similar  bond in such  reasonable  sum as the  Trustee  may  direct
indemnifying  the Trustee and its agent for so doing. The Trustee shall have the
power to require  from an insurer or insurers a blanket  lost  security  bond or
bonds in respect of the  replacement  of lost,  stolen,  destroyed  or mutilated
Certificates.  The  Trustee  shall pay all  premiums  and  other  funds of money
payable for such purpose out of the Trust Fund with such  contribution,  if any,
by those insured as may be determined by the Trustee in its sole discretion.  If
such  blanket lost  security  bond is required,  the Trustee may  authorize  and
direct  (upon such terms and  conditions  as the  Trustee  may from time to time
impose) any agent to whom the indemnity of such bond extends to take such action
to replace any lost, stolen,  destroyed or mutilated Certificate without further
action or approval by the Trustee.

12.10 Death of a Unitholder

      The death of a Unitholder  during the  continuance  of the Trust shall not
terminate  the Trust or any of the mutual or respective  rights and  obligations
created  by  or  arising  under  this   Declaration  of  Trust,  nor  give  such
Unitholder's  personal  representative  a right to an  accounting or to take any
action in court or otherwise against other  Unitholders,  the Trust, the Trustee
or the Trust  Fund,  but  shall  entitle  the  personal  representatives  of the
deceased Unitholder to demand and receive,  pursuant to the provisions hereof, a
new  Certificate  for  Units in place of the  Certificate  held by the

                                     - 44 -

<PAGE>

deceased   Unitholder,   and  upon  the   acceptance   thereof   such   personal
representatives  shall  succeed to all rights of the deceased  Unitholder  under
this Declaration of Trust.

12.11 Unclaimed Interest or Distribution

      In the event that the  Trustee  shall hold any amount of interest or other
distributable  amount which is unclaimed or which cannot be paid for any reason,
the Trustee  shall be under no  obligation  to invest or reinvest the same,  but
shall  only be obliged  to hold the same in a current  interest-bearing  account
pending payment to the Person or Persons entitled thereto. The Trustee shall, as
and when required by law, and may at any time prior to such required  time,  pay
all or part of such interest or other distributable amount so held to the Public
Trustee (or other appropriate government official or agency) whose receipt shall
be a good discharge and release of the Trustee.

12.12 Exchanges of Certificates

      Certificates  representing  any number of Units may be  exchanged  without
charge  for  Certificates  representing  an  equivalent  number  of Units in the
aggregate.  Any  exchange  of  Certificates  may be made at the  offices  of the
Trustee or at the offices of any Transfer  Agent where  registers are maintained
for the  Certificates  pursuant  to the  provisions  of  this  Article  12.  Any
Certificates  tendered  for  exchange  shall be  surrendered  to the  Trustee or
appropriate Transfer Agent and shall be cancelled.

                                   ARTICLE 13
                                OFFERS FOR UNITS

13.1  Terminology

      In this Article 13:

      Dissenting  Unitholder  means a  Unitholder  who does not  accept an Offer
      referred to in Section  13.2 and  includes  any  assignee of the Unit of a
      Unitholder to whom such an Offer is made,  whether or not such assignee is
      recognized under this Declaration of Trust;

      Offer  means an  offer  to  acquire  outstanding  Units  which is open for
      acceptance for a period of not less than 45 days and where, as of the date
      of the  offer to  acquire,  the  Units  that are  subject  to the offer to
      acquire,  together with the Offeror's  Units,  constitute in the aggregate
      20% or more of all outstanding Units;

      offer to acquire includes an acceptance of an offer to sell;

      Offeror  means a  Person,  or two or more  Persons  acting  jointly  or in
      concert, who make an Offer;

                                     - 45 -

<PAGE>

      Offeror's Notice means the notice described in Section 13.3; and

      Offeror's Units means Units  beneficially  owned, or over which control or
      direction  is  exercised,  on the  date of an Offer  by the  Offeror,  any
      Affiliate  or  Associate  of the  Offeror or any Person or company  acting
      jointly or in concert with the Offeror.

13.2  Offers for Units

      If an Offer for all of the outstanding  Units (other than Units held by or
on behalf of the Offeror or an  Affiliate  or  Associate of the Offeror) is made
and by such Offer,  the  Offeror  agrees to be bound by the  provisions  of this
Article 13 and:

      (a)   within the time  provided in the Offer for its  acceptance or within
            120 days after the date the Offer is made,  whichever  period is the
            shorter, the Offer is accepted by Unitholders  representing at least
            90% of the outstanding Units, other than the Offeror's Units;

      (b)   the  Offeror  is bound to take up and pay for,  or has  taken up and
            paid for the Units of the Unitholders who accepted the Offer; and

      (c)   the Offeror  complies  with the  provisions  of Section  13.3 to the
            extent applicable to the Offeror;

the Offeror is entitled to acquire, and the Dissenting  Unitholders are required
to sell to the Offeror,  the Units held by the  Dissenting  Unitholders  for the
same  consideration  per Unit  payable  or paid,  as the case may be,  under the
Offer.

13.3  Compulsory Acquisition Rights

      Where  an  Offeror  is  entitled  to  acquire  Units  held  by  Dissenting
Unitholders  pursuant to Section 13.2,  and the Offeror  wishes to exercise such
right,  the Offeror shall send by registered  mail within 30 days after the date
of termination of the Offer a notice (the "Offeror's Notice") to each Dissenting
Unitholder stating that:

      (a)   Unitholders  holding  at least 90% of the Units of all  Unitholders,
            other than Offeror's Units, have accepted the Offer;

      (b)   the  Offeror  is bound to take up and pay for,  or has  taken up and
            paid for, the Units of the Unitholders who accepted the Offer;

      (c)   Dissenting  Unitholders  must transfer their respective Units to the
            Offeror on the terms on which the Offeror  acquired the Units of the
            Unitholders  who accepted the Offer within 21 days after the date of
            the sending of the Offeror's Notice; and

                                     - 46 -

<PAGE>

      (d)   Dissenting    Unitholders    must   send   their   respective   Unit
            Certificate(s)  to the Trust  within  21 days  after the date of the
            sending of the Offeror's Notice.

      A Dissenting  Unitholder  to whom an Offeror's  Notice is sent pursuant to
this  Section  13.3  shall,  within 21 days after the  sending of the  Offeror's
Notice, send his or her Certificate(s) to the Trust, duly endorsed for transfer.

      Within 21 days after the Offeror  sends an  Offeror's  Notice  pursuant to
this Section 13.3, the Offeror shall pay or transfer to the Trustee,  or to such
other Person as the Trustee may direct, the cash or other  consideration that is
payable to Dissenting Unitholders pursuant to Section 13.2.

      The Trustee,  or the Person  directed by the Trustee,  shall hold in trust
for the  Dissenting  Unitholders  the  cash or  other  consideration  they or it
receives  under this Section 13.3.  The Trustee,  or such Person,  shall deposit
cash in a separate  account in a Canadian  chartered bank, and shall place other
consideration in the custody of a Canadian chartered bank or similar institution
for safekeeping.

13.4  Trustee's Duties

      Within  30 days  after  the date of the  sending  of an  Offeror's  Notice
pursuant to Section  13.3,  the Trustee,  if the Offeror has  complied  with the
provisions of Section 13.3 applicable to the Offeror, shall:

      (a)   do all acts and  things and  execute  and cause to be  executed  all
            instruments  as  in  the  Trustee's  opinion  may  be  necessary  or
            desirable  to cause  the  transfer  of the  Units of the  Dissenting
            Unitholders to the Offeror;

      (b)   send  to  each  Dissenting  Unitholder  who has  complied  with  the
            provisions of Section 13.3 applicable to Dissenting  Unitholders the
            consideration to which such Dissenting  Unitholder is entitled under
            Section 13.3; and

      (c)   send to each  Dissenting  Unitholder  who has not complied  with the
            provisions of Section 13.3  applicable  to Dissenting  Unitholders a
            notice stating that:

            (i)   his or her Units have been transferred to the Offeror;

            (ii)  the Trustee or such other Person  designated in such notice is
                  holding in trust the consideration for such Units; and

            (iii) the Trustee, or such other Person, will send the consideration
                  to such  Dissenting  Unitholder as soon as  practicable  after
                  receiving

                                     - 47 -

<PAGE>

                  such  Dissenting  Unitholders  Certificate(s)  or  such  other
                  documents  as the Trustee or such other  Person may require in
                  lieu thereof;

and the Trustee is hereby  appointed  the agent and  attorney of the  Dissenting
Unitholders for the purposes of giving effect to the foregoing provisions.

13.5  Restrictions

      Subject  to  applicable  law,  an Offeror  cannot  make an Offer for Units
unless, concurrent with the communication of the Offer to any Unitholder, a copy
of the Offer is provided to the Trust.

                                   ARTICLE 14
                                POWER OF ATTORNEY

14.1  Power of Attorney

      Each Unitholder hereby grants to the Trustee,  its successors and assigns,
a power of attorney  constituting the Trustee,  with full power of substitution,
as his or her true and lawful  attorney to act on his or her  behalf,  with full
power and authority in his or her name, place and stead,  and to execute,  under
seal or otherwise, swear to, acknowledge,  deliver, make or file or record when,
as and where required:

      (a)   this  Declaration  of Trust,  any amendment to this  Declaration  of
            Trust and any other  instrument  required or  desirable  to qualify,
            continue and keep in good standing the Trust as a mutual fund trust;

      (b)   any  instrument,  deed,  agreement  or document in  connection  with
            carrying on the activities and affairs of the Trust as authorized in
            this Declaration of Trust;

      (c)   all conveyances and other documents  required in connection with the
            dissolution or liquidation of the Trust in accordance with the terms
            of this Declaration of Trust; and

      (d)   any  and  all  elections,  determinations  or  designations  whether
            jointly with third parties or otherwise, under the Income Tax Act or
            any other taxation or other legislation or similar laws of Canada or
            of any other  jurisdiction in respect of the affairs of the Trust or
            of a Unitholder's interest in the Trust.

The Power of Attorney  granted herein is irrevocable and will survive the death,
disability or bankruptcy of the  Unitholder or the  assignment by the Unitholder
of all or part of his or her  interest  in the Trust and will extend to and bind
the  heirs,  executors,

                                     - 48 -

<PAGE>

administrators and other legal representatives and successors and assigns of the
Unitholder.

                                   ARTICLE 15
                                   TERMINATION

15.1  Termination Date

      Unless the Trust is  terminated  or extended  earlier,  the Trustee  shall
commence to wind up the affairs of the Trust on December 31, 2095.

15.2  Termination by Resolution of Unitholders

      The Unitholders  may vote by Special  Resolution to terminate the Trust at
any meeting of Unitholders  duly called for such purpose,  whereupon the Trustee
shall commence to wind up the affairs of the Trust.

15.3  Procedure Upon Termination

      Forthwith  upon being  required  to commence to wind up the affairs of the
Trust,  the Trustee shall give notice thereof to the  Unitholders,  which notice
shall designate the time or times at which Unitholders may surrender their Units
for  cancellation  and the date at which  the  register  of the  Trust  shall be
closed.

15.4  Powers of the Trustee upon Termination

      After the date on which the Trustee is required to commence to wind up the
affairs of the Trust,  the Trustee shall carry on no  activities  except for the
purpose of winding up the affairs of the Trust as herein  provided and, for this
purpose,  the Trustee  shall  continue to be vested with and may exercise all or
any of the powers conferred upon the Trustee under this Declaration of Trust.

15.5  Sale of Investments

      After the date referred to in Section  15.4,  the Trustee shall proceed to
wind up the affairs of the Trust as soon as may be reasonably  practicable,  and
for such purpose  shall,  subject to the terms of any  agreements  binding on or
obligations  of the Trust  and the  Trustee,  sell and  convert  into  money the
Royalty and other assets  comprising  the Trust Fund in one  transaction or in a
series  of  transactions  at  public  or  private  sale  and do all  other  acts
appropriate  to  liquidate  the Trust  Fund,  and shall in all  respects  act in
accordance  with the  directions,  if any, of the  Unitholders.  Notwithstanding
anything  herein  contained,  in no event  shall the Trust be wound up until the
Royalty shall have been sold.

                                     - 49 -

<PAGE>

15.6  Distribution of Proceeds

      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 Royalty and other assets  together with any cash forming part of
the Trust Fund among the Unitholders in accordance with their Pro Rata Shares.

15.7  Further Notice to Unitholders

      If all of the  Unitholders  shall  not have  surrendered  their  Units for
cancellation  within 6 months after the time specified in the notice referred to
in Section 15.3, the Units that have not been surrendered  shall be deemed to be
cancelled  without  prejudice  to the  rights of the  holders  of such  Units to
receive their Pro Rata Shares of the amounts  referred to in Section  15.6,  and
the  Trustee  may either  take  appropriate  steps,  or appoint an agent to take
appropriate  steps, to contact such Unitholders  (deducting all expenses thereby
incurred from the amounts to which such  Unitholders  are entitled as aforesaid)
or, in the discretion of the Trustee, may pay such amounts into court.

15.8  Responsibility of Trustee after Sale and Conversion

      The Trustee  shall be under no  obligation  to invest the  proceeds of any
sale of the Royalty or other assets or cash forming part of the Trust Fund after
the date referred to in Section 15.4, and after such sale the sole obligation of
the Trustee  under this  Declaration  of Trust shall be to hold such proceeds in
trust for distribution under Section 15.6.

                                   ARTICLE 16
                             SUPPLEMENTAL INDENTURES

16.1  Provision for Supplemental Indentures

      From time to time the Trustee and the Corporation may, and they shall when
so directed in accordance  with the  provisions  hereof,  execute and deliver by
their proper  officers  indentures or  instruments  supplemental  hereto,  which
thereafter  shall form part hereof,  for any one or more or all of the following
purposes:

      (a)   giving effect to any Special Resolution;

      (b)   making such  modifications not inconsistent with this Declaration of
            Trust as may be necessary  or  desirable  with respect to matters or
            questions arising  hereunder,  provided that such  modifications are
            not, in the opinion of the Trustee,  prejudicial to the interests of
            the Unitholders; and

                                     - 50 -

<PAGE>

      (c)   making any  modification  in the form of Certificate  which does not
            materially affect the substance thereof;

provided that the Trustee may in its sole  discretion  decline to enter into any
such  supplemental  indenture  which  in its  opinion  may not  afford  adequate
protection to the Trustee when the same shall become operative.

                                   ARTICLE 17
                             NOTICES TO UNITHOLDERS

17.1  Notices

      Any notice  required  to be given under this  Declaration  of Trust to the
Unitholders  shall be given by letter or circular  sent  through  ordinary  post
addressed to each  registered  Unitholder  at his last address  appearing on the
register;  provided that if there is a general  discontinuance of postal service
due to strike,  lockout or  otherwise,  such notice may be given by  publication
twice in the  National  Edition  of The Globe  and Mail or any  other  newspaper
having  national  circulation  in Canada;  provided  further that if there is no
newspaper having national circulation,  then notice shall be given by publishing
twice in a  newspaper  in each city  where  the  register  or a branch  transfer
register  is  maintained  by the  Transfer  Agent.  Any notice so given shall be
deemed to have been given on the day on which the letter or circular  was posted
or, in the case of notice  being  given by  publication,  the day of the  second
publication  in the designated  newspaper or  newspapers.  In proving notice was
posted,  it shall be  sufficient  to prove  that  such  letter or  circular  was
properly addressed, stamped and posted.

17.2  Failure to Give Notice

      The  failure  by  the  Trustee,  by  accident  or  omission  or  otherwise
unintentionally,  to give  Unitholders  any notice provided for herein shall not
affect the validity or effect of any action referred to in such notice,  and the
Trustee shall not be liable to any Unitholder for any such failure.

17.3  Joint Holders

      Service of a notice or  document  on any one of several  joint  holders of
Units shall be deemed effective service on the other joint holders.

17.4  Service of Notice

      Any notice or  document  sent to the address of a  Unitholder  pursuant to
this  Article  17  shall,  notwithstanding  the  death  or  bankruptcy  of  such
Unitholder,  and  whether  or not  the  Trustee  has  notice  of such  death  or
bankruptcy,  be deemed to have been  fully  served,  and such  service  shall be
deemed sufficient service on all Persons interested in the Units concerned.

                                     - 51 -

<PAGE>

                                   ARTICLE 18
                             AUDITORS AND DIRECTORS

18.1  Qualification of Auditors

      The  Auditors  shall  be  an  independent  recognized  firm  of  chartered
accountants which has an office in Calgary, Alberta.

18.2  Appointment of Auditors

      Coopers & Lybrand, Chartered Accountants, shall be the initial auditors of
the Trust,  to hold such office until the first annual meeting of Unitholders at
such  remuneration  as may be  approved by the  Trustee  from time to time.  The
Auditors  will be  selected  by Ordinary  Resolution  at each annual  meeting of
Unitholders.

18.3  Change of Auditors

      The  Auditors  may at any time be removed by the Trustee with the approval
of  the  Unitholders  by  means  of  an  Ordinary  Resolution  at a  meeting  of
Unitholders  duly  called  for that  purpose,  and upon the  resignation  or the
removal of the  Auditors,  new auditors may be appointed by the Trustee with the
approval of the Unitholders by means of an Ordinary Resolution at a meeting duly
called for the purpose.

18.4  Reports of Auditors

      The  Auditors  shall audit the accounts of the Trust at least once in each
Year,  and a  report  of the  Auditors  with  respect  to the  annual  financial
statements  of the Trust  shall be  provided  to each  Unitholder  as set out in
Section 19.3.

18.5  Appointment and Removal of Directors

      Provided that the Trustee, in its capacity as trustee of the Trust, is the
registered owner of voting shares in the capital of the Corporation:

      (a)   the Trustee  shall,  immediately  following  each annual  meeting of
            Unitholders, vote such shares to resolve to elect as Directors those
            persons  selected to sit as directors of the Corporation by Ordinary
            Resolution at each annual meeting of Unitholders; and

      (b)   the Trustee  may vote such shares to resolve to remove any  Director
            as  a  director  of  the  Corporation   with  the  approval  of  the
            Unitholders  by means of an  Ordinary  Resolution  at a  meeting  of
            Unitholders duly called for that purpose.

                                     - 52 -

<PAGE>

                                   ARTICLE 19
                   ACCOUNTS, RECORDS AND FINANCIAL STATEMENTS

19.1  Records

      The Trustee  shall keep such books,  records and accounts as are necessary
and  appropriate  to document the Trust Fund and each  transaction of the Trust.
Without  limiting the  generality  of the  foregoing,  the Trustee  will, at its
principal  office in Calgary,  Alberta,  keep records of all transactions of the
Trust,  a list of the  Royalty  and other  assets of the Trust Fund from time to
time, and a copy of this  Declaration  of Trust and the Material  Contracts with
any amendments thereto.

19.2  Quarterly Reporting to Unitholders

      The Trustee will mail to each Unitholder,  within 60 days after the end of
each Quarter  unaudited  financial  statements  of the Trust for the most recent
Quarter.  The  Corporation  will review any  forecast  provided in any  Offering
Document  and, if necessary,  will provide the Trustee with a quarterly  update.
The Trustee will mail any such update to Unitholders.

19.3  Annual Reporting to Unitholders

      The Trustee will mail:

      (a)   to each Unitholder,  within 140 days after the end of each Year, the
            audited  financial  statements  of the  Trust  for the  most  recent
            completed Year together with the report of the Auditors thereon; and

      (b)   to each Person who received a  distribution  from the Trust during a
            Year,  within 90 days after the end of such Year,  the tax reporting
            information relating to such Year prescribed by the Income Tax Act.

19.4  Information Available to Unitholders

      The following  information  will be made  available to  Unitholders on the
following terms:

      (a)   each  Unitholder  shall have the right to  obtain,  on demand and on
            payment of reasonable  reproduction  costs,  from the head office of
            the Trust,  a copy of this  Declaration  of Trust and any  indenture
            supplemental hereto or any Material Contract;

      (b)   each  Unitholder,  upon payment of a reasonable fee and upon sending
            to the Trustee the  affidavit  referred to in Section  19.4(d),  may
            upon application require the Trustee to provide, within 10 days from
            the receipt of the affidavit, a list (the "basic list") made up to a
            date not more than 10

                                     - 53 -

<PAGE>

            days  before the date of receipt of the  affidavit  setting  out the
            names  of the  Unitholders,  the  number  of  Units  owned  by  each
            Unitholder  and the  address  of each  Unitholder  as  shown  on the
            records of the Trustee;

      (c)   a Person  requiring  the  Trustee to provide a basic list may, if he
            states in the  affidavit  referred  to in  Section  19.4(d)  that he
            requires  supplemental lists, require the Trustee, upon payment of a
            reasonable  fee,  to  provide  supplemental  lists  setting  out any
            changes  from  the  basic  list in the  names  or  addresses  of the
            Unitholders  and the number of Units  owned by each  Unitholder  for
            each  Business Day following the day to which the basic list is made
            up;

      (d)   the affidavit referred to in Section 19.4(b) shall state:

            (i)   the name and address of the applicant,

            (ii)  the name and address for service of the body  corporate if the
                  applicant is a body corporate, and

            (iii) that the basic  list and any  supplemental  lists  will not be
                  used except as permitted under Section 19.4(e); and

      (e)   a list of Unitholders  obtained under this Section 19.4 shall not be
            used by any Person except in connection with:

            (i)   an effort to influence the voting of Unitholders,

            (ii)  an offer to acquire Units, or

            (iii) any other matter relating to the affairs of the Trust.

19.5  Income Tax: Obligations of the Trustee

      The Trustee  shall  satisfy,  perform and discharge  all  obligations  and
responsibilities  of the  Trustee  under  the  Income  Tax  Act  or any  similar
provincial  legislation,  and  neither  the  Trust  nor  the  Trustee  shall  be
accountable  or  liable  to any  Unitholder  by reason of any act or acts of the
Trustee consistent with any such obligations or responsibilities.

19.6  Income Tax: Designations

      In the  return of its  income  under Part I of the Income Tax Act for each
Year,  the Trust  shall  make such  designations,  including  designations  with
respect  to any  amounts  distributed  or payable  to  Unitholders  in the Year,
designations with respect to reimbursed Crown charges which are deemed to become
payable to beneficiaries  and  designations  with respect to any taxable capital
gains  realized and  distributed to

                                     - 54 -

<PAGE>

Unitholders by the Trust in the Year and any interest  payable to Unitholders in
the Year, as shall be permitted  under the  provisions of the Income Tax Act and
as the Trustee in its sole discretion shall deem to be reasonable and equitable.
In respect of the first  Year,  in filing a return of income for the Trust,  the
Trust shall elect  pursuant to subsection  132(6) of the Income Tax Act that the
Trust be deemed to be a mutual fund trust for the entire Year.

19.7  Income Tax: Deductions

      The  Corporation  shall  determine the tax deductions to be claimed by the
Trust in any Year, and the Trustee shall claim such  deductions for the purposes
of computing  the income of the Trust  pursuant to the  provisions of the Income
Tax Act.

19.8  Fiscal Year

      The fiscal year of the Trust shall end on December 31.

                                   ARTICLE 20
                                  MISCELLANEOUS

20.1  Continued Listing

      The  Trustee  hereby  appoints  the  Corporation  as its  agent,  and  the
Corporation  hereby  covenants  to the Trustee and agrees that it shall,  at the
cost and expense of the Trust, take all steps and actions and do all things that
may be  required,  to obtain and maintain the listing and posting for trading of
the Units on the Toronto Stock  Exchange and to maintain the Trust's status as a
"reporting issuer" not in default of the securities  legislation and regulations
of each of the provinces of Canada.

20.2  Successors and Assigns

      The provisions of this Declaration of Trust shall enure to the benefit of,
and be binding upon, the parties hereto and their successors and assigns.

20.3  Counterparts

      This Declaration of Trust may be executed in several counterparts, each of
which when so executed shall be deemed to be an original,  and such counterparts
together  shall   constitute  one  and  the  same  instrument   which  shall  be
sufficiently evidenced by any such original counterparts.

20.4  Severability

      If any  provision  of this  Declaration  of Trust shall be held invalid or
unenforceable in any  jurisdiction,  such invalidity or  unenforceability  shall
attach only to

                                     - 55 -

<PAGE>

such provision in such jurisdiction and shall not in any manner affect or render
invalid or unenforceable  such provision in any other  jurisdiction or any other
provision of this Declaration of Trust in any jurisdiction.

20.5  Day Not a Business Day

      In the  event  that  any  day  on or  before  which  any  amount  is to be
determined  or any action is  required to be taken  hereunder  is not a Business
Day, then such amount shall be determined or such action shall be required to be
taken at or  before  the  requisite  time on the next  succeeding  day that is a
Business Day.

20.6  Time of the Essence

      Time shall be of the essence in this Declaration of Trust.

20.7  Governing Law

      This  Declaration of Trust and the  Certificates  shall be governed by and
construed in accordance with the laws of the Province of Alberta and the laws of
Canada  applicable  therein  and shall be  treated  in all  respects  as Alberta
contracts.  The parties hereto hereby  irrevocably submit to the jurisdiction of
the courts of the Province of Alberta.

20.8  Notices to Trustee and Corporation

      Any notice or other  communication  to the  Trustee or to the  Corporation
under  this  Declaration  of Trust  shall be in  writing  and shall be valid and
effective  if  delivered by prepaid  courier or if given by  registered  letter,
postage prepaid, or if transmitted by electronic or  telecommunications  device,
addressed as follows:

      if to the Trustee:

            Computershare Trust Company of Canada
            Suite 600
            530 - 8th Avenue S.W.
            Calgary, Alberta
            T2P 3S8

            Attention:   Corporate Trust Manager

            Fax:         (403) 267-6598

                                     - 56 -

<PAGE>

      if to the Corporation:

            PrimeWest Energy Inc.
            Suite 4700
            150 - 6th Avenue S.W.
            Calgary, Alberta
            T2P 3Y7

            Attention:   Chief Executive Officer

            Fax:         (403) 234-6670

      Any such notice or other  communication shall be deemed to have been given
on the date of delivery or  transmission  or, if mailed,  on the fifth day after
deposit in the Canadian mail.

      The  Corporation  or the Trustee may from time to time notify the other in
writing of a change of address which  thereafter,  until changed by like notice,
shall be the address of the  Corporation or the Trustee for all purposes of this
Declaration of Trust.

      If, by  reason of a strike,  lockout  or other  work  stoppages  actual or
threatened, involving postal employees, any notice to be given by mail hereunder
could reasonably be considered  unlikely to reach its  destination,  such notice
shall be valid and effective only if it is delivered at the appropriate  address
provided  in this  Section  20.8  by  prepaid  courier  or by  cable,  telegram,
electronic or telecommunications  device or other means of prepaid,  transmitted
and recorded communication.

                                     - 57 -

<PAGE>

20.9  References to Agreements

      Any reference herein to any agreement,  contract or obligation shall refer
to such  agreement,  contract or obligation as the same may be amended from time
to time.

      IN WITNESS  WHEREOF  each of the parties has caused  this  Declaration  of
Trust to be duly executed.

                         PRIMEWEST ENERGY INC.

                         Per:   /s/
                                ------------------------------------------------

                         Per:   /s/
                                ------------------------------------------------

                         COMPUTERSHARE TRUST
                         COMPANY OF CANADA

                         Per:   /s/
                                ------------------------------------------------

                         Per:   /s/
                                ------------------------------------------------

                                     - 58 -

<PAGE>

                                   SCHEDULE A

      To the annexed declaration of trust dated August 2, 1996 and restated
                                   November 6,
                                      2002
                                     between
                             PRIMEWEST ENERGY INC.,
                                       and
                      COMPUTERSHARE TRUST COMPANY OF CANADA

                  (Form of Certificate in the English Language)

                                   TRUST UNITS

                             PRIMEWEST ENERGY TRUST

                   (a trust created under the laws of Alberta
by a Declaration of Trust dated August 2, 1996 and as amended and restated from
                                 time to time)

No.
                                                             Trust Units

                                                             CUSIP

THIS CERTIFIES THAT

is the  registered  holder of  _______________  fully paid Trust Units issued by
PRIMEWEST ENERGY TRUST (the "Trust") transferable only on the books of the Trust
by the registered  holder hereof in person or by attorney duly  authorized  upon
surrender of this certificate properly endorsed.

      The Trust Units  represented by this certificate are issued upon the terms
and subject to the  conditions of a declaration  of trust (which  declaration of
trust together with all instruments  supplemental or ancillary thereto is herein
referred to as the  "Declaration  of Trust") dated August 2, 1996 as amended and
restated from time to time,  between  PrimeWest Energy Inc. (the  "Corporation")
and  Computershare  Trust Company of Canada (the  "Trustee"),  the provisions of
which  Declaration  of Trust are  binding  upon all  holders of Trust Units (the
"Unitholders"),  and to all of which provisions the holder of this  certificate,
by acceptance of this certificate, assents.

<PAGE>

      A copy of the Declaration of Trust pursuant to which this  certificate and
the Trust Units represented  hereby are issued may be obtained by any Unitholder
on demand and on payment of reasonable  reproduction  costs from the head office
of the Trust.

      The Trust Units  represented by this certificate may be transferred,  upon
compliance  with the conditions  prescribed in the  Declaration of Trust, on the
register  kept at the office of the Transfer  Agent and  Registrar for the Trust
Units in the City of  Calgary,  the City of Toronto  and at such other  place or
places, if any, as the Trustee may designate, by the registered holder hereof or
his executors or administrators or other legal  representatives  or his or their
attorney  duly  appointed  by an  instrument  in writing  in form and  execution
satisfactory   to  the  Trustee,   and  upon  compliance  with  such  reasonable
requirements as the Trustee may prescribe.

      The  Declaration of Trust contains  provisions for the holding of meetings
of Unitholders and rendering  resolutions  passed at such meetings  binding upon
all Unitholders.

      The  Declaration  of Trust  provides that no Unitholder  shall incur or be
subject to any personal liability whatsoever, in tort, contract or otherwise, to
any person in connection  with the assets of the Trust or the obligations or the
affairs of the Trust or with  respect to any act  performed by the Trustee or by
any other person  pursuant to the  Declaration  of Trust,  and all persons shall
look solely to the assets of the Trust for  satisfaction of claims of any nature
arising out of or in connection therewith and the assets of the Trust only shall
be subject to levy or execution.

                                      - 2 -

<PAGE>

      This  certificate  shall not be valid for any purpose  until it shall have
been  countersigned  and  registered by the Transfer Agent and Registrar for the
Trust Units.

      IN WITNESS  WHEREOF  the  Corporation  has caused this  certificate  to be
signed by its duly authorized officers.

DATED  _________________________________

                         PRIMEWEST ENERGY INC.
                         On behalf of the Trust

                         By:  __________________________________________________
                              Authorized Officer

                         By:  __________________________________________________
                              Authorized Officer

                     Countersigned and Registered

                         COMPUTERSHARE TRUST
                         COMPANY OF CANADA, Transfer
                         Agent and Registrar

                         By:  __________________________________________________
                              Authorized Officer

<PAGE>

TRANSFER FORM

FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto

(please print or typewrite name and address of assignee)

__________ Trust Units of PrimeWest Energy Trust represented by this certificate
and  hereby  irrevocably   constitutes  and  appoints   ________________________
attorney to transfer the said Trust Units on the  registers of the Trust for the
said purpose, with full power of substitution in the premises.

Dated __________________________________

The signature of the  registered  holder
of  the   within   certificate   to  the
foregoing  assignment must be guaranteed
by a chartered bank, by a trust company,
or by a member firm of the Toronto Stock
Exchange.                                              (SIGNATURE OF TRANSFEROR)

________________________________________
Signature Guaranteed

<PAGE>

                    AMENDED AND RESTATED DECLARATION OF TRUST
                      FIRST SUPPLEMENTAL AMENDING AGREEMENT

      This Amended and Restated Declaration of Trust First Supplemental Amending
Agreement is made effective the 6th day of May, 2004:

                                     Between

                              PRIMEWEST ENERGY INC.
               a body corporate amalgamated under the laws of the
         Province of Alberta, with an office in the City of Calgary, in
                   the Province of Alberta (the "Corporation")

                                       and

                      COMPUTERSHARE TRUST COMPANY OF CANADA
             a trust company incorporated under the laws of Canada,
         with offices in the City of Calgary, in the Province of Alberta
                                 (the "Trustee")

WHEREAS:

A.    By declaration of trust dated August 2, 1996 (the  "Declaration of Trust")
      among the  Corporation,  Montreal  Trust  Company of Canada (the  "Initial
      Trustee") and the Initial  Unitholder,  the Initial Unitholder settled the
      Trust upon the terms set forth in the Declaration of Trust;

B.    The  Declaration  of Trust has  subsequently  been  amended  and  restated
      November 6, 2002 (the "Amended and Restated Declaration of Trust") and the
      Initial Trustee replaced with the Trustee;

C.    The Amended and Restated  Declaration  of Trust  provides that the Amended
      and Restated  Declaration  of Trust may be amended by the Trustee with the
      consent of the Unitholders by Special Resolution;

D.    The Unitholders,  by Special  Resolution  passed at the Annual General and
      Special  Meeting  of  Unitholders  held on May 6,  2004  (the  "Meeting"),
      approved  certain  amendments to the Amended and Restated  Declaration  of
      Trust; and

E.    The  Corporation  and the Trustee  propose to enter into this  Amended and
      Restated  Declaration of Trust First Supplemental  Amending Agreement (the
      "Supplemental Amending Agreement") to effect the amendments so approved by
      Unitholders at the Meeting.

<PAGE>

                                      - 2 -

NOW THEREFORE THIS AMENDED AND RESTATED  DECLARATION OF TRUST FIRST SUPPLEMENTAL
AMENDING  AGREEMENT  WITNESSETH  that the  Corporation  and the Trustee agree as
follows:

                                    ARTICLE 1
                                 INTERPRETATION

1.1   Definitions

      In this  Supplemental  Amending  Agreement,  unless the context  otherwise
requires, words and phrases used herein and which are defined in the Amended and
Restated  Declaration  of Trust shall have the meaning herein which are given to
such words and phrases in the Amended and Restated Declaration of Trust.

1.2   Headings

      The division of this  Supplemental  Amending  Agreement  into Articles and
Sections,  the  provision of a table of contents,  and the insertion of headings
are for  convenience of reference only and shall not affect the  construction or
interpretation of this Supplemental Amending Agreement.

1.3   Construction of Terms

      In this  Supplemental  Amending  Agreement,  words  importing the singular
number  include the plural and vice versa;  words  importing  gender include the
masculine,  feminine and neuter  genders;  references to dollar amounts refer to
such amounts in Canadian  currency;  references to "this  Supplemental  Amending
Agreement",  "hereto",  "herein",  "hereof",  "hereby",  "hereunder" and similar
expressions  refer  to  this  Supplemental  Amending  Agreement,  and not to any
particular  Article,  Section or other portion hereof, and include any and every
instrument supplemental or ancillary hereto or in implementation hereof; and the
expressions "Article" and "Section" followed by a number, letter, or combination
of  numbers  and  letters  refer to the  specified  Article  or  Section of this
Supplemental Amending Agreement.

                                    ARTICLE 2
             AMENDMENTS TO AMENDED AND RESTATED DECLARATION OF TRUST

2.1   Replacement of Section 3.8

      The Amended and Restated  Declaration of Trust is hereby amended as of the
date hereof by deleting  Section 3.8 in its entirety  and  replacing it with the
following:

<PAGE>

                                      - 3 -

"3.8  Non-Resident Unitholders

      It is in the best interest of Unitholders that the Trust always qualify as
a "mutual fund trust" under the Income Tax Act. Accordingly,  in order to ensure
the maintenance of such status:

      (a)   The Corporation shall:

            (i)   prior  to the  completion  of any  transaction  involving  the
                  acquisition by the Trust of any Subsequent Investment;

            (ii)  prior to any  material  modification  to the Trust  Fund other
                  than as contemplated by paragraph (i);

            (iii) promptly   following  any  proposed   amendment  to  paragraph
                  132(7)(a)  of the  Income  Tax Act or the  publication  of any
                  administrative  bulletin  or other  notice  of  interpretation
                  relating to the interpretation or application of such section;
                  or

            (iv)  otherwise at any time requested by the Trustee,

            obtain an opinion of Counsel confirming whether the Trust is, at the
            date thereof and following  such  transaction or event (which in the
            case of  paragraph  (iii)  shall mean the coming  into effect of the
            amendment  or  change  of  interpretation),   entitled  to  rely  on
            paragraph  132(7)(a)  of  the  Income  Tax  Act  (or  any  successor
            provision  thereto)  for  purposes of  qualifying  as a "mutual fund
            trust" under the Income Tax Act.

      (b)   If at any time the board of directors of the Corporation determines,
            in its sole discretion, or becomes aware, pursuant to Section 3.8(a)
            or  otherwise,  that the  Trust's  ability  to  continue  to rely on
            paragraph  132(7)(a)  of  the  Income  Tax  Act  (or  any  successor
            provision  thereto)  for  purposes of  qualifying  as a "mutual fund
            trust"  thereunder  is  in  jeopardy,   then  forthwith  after  such
            determination:

            (i)   it shall  be the sole  responsibility  of the  Corporation  to
                  monitor the holdings by Non-Residents; and

            (ii)  the  Corporation  shall  take such steps as are  necessary  or
                  desirable to ensure that the Trust is not maintained

<PAGE>

                                      - 4 -

                  primarily for the benefit of  non-residents  of Canada (within
                  the  meaning  of the  Income  Tax  Act) or that  the  Trust is
                  otherwise able to continue to qualify as a mutual fund trust.

      (c)   The Corporation  may, at any time and from time to time, in its sole
            discretion,  request that the Trustee make  reasonable  efforts,  as
            practicable  in the  circumstances,  to  obtain  declarations  as to
            beneficial  ownership under Section 8.11, perform residency searches
            of unitholder and beneficial  unitholder  mailing  address lists and
            take such other steps specified by the  Corporation,  at the cost of
            the Trust,  to determine or estimate as best  possible the residence
            of the beneficial owners of Trust Units.

      (d)   If at any time the board of  directors  of the  Corporation,  in its
            sole  discretion,  determines that it is in the best interest of the
            Trust, the Corporation,  notwithstanding the ability of the Trust to
            continue to rely on  paragraph  132(7)(a)  of the Income Tax Act for
            the purpose of  qualifying as a "mutual fund trust" under the Income
            Tax Act, may:

            (i)   require  the  Trustee to refuse to accept a  subscription  for
                  Trust  Units  from,  or issue or  register a transfer of Trust
                  Units to, a person unless the person provides a declaration to
                  the Corporation  pursuant to Section 8.11 that the Trust Units
                  to be  issued  or  transferred  to such  person  will not when
                  issued or transferred be beneficially  owned by a non-resident
                  of Canada;

            (ii)  to the extent practicable in the circumstances,  send a notice
                  to  registered  holders of Trust Units which are  beneficially
                  owned by non-residents  of Canada,  chosen in inverse order to
                  the order of acquisition or  registration  of such Trust Units
                  beneficially owned by non-residents of Canada or in such other
                  manner  as  the   Corporation   may  consider   equitable  and
                  practicable,  requiring  them to sell their  Trust Units which
                  are  beneficially  owned  by  non-residents  of  Canada  or  a
                  specified  portion  thereof  within a specified  period of not
                  less than 60 days. If the  Unitholders  receiving  such notice
                  have not sold the  specified  number  of such  Trust  Units or
                  provided the Corporation with satisfactory evidence that such

<PAGE>

                                      - 5 -

                  Trust Units are not beneficially owned by non-residents within
                  such period, the Corporation may, on behalf of such registered
                  Unitholder, sell such Trust Units and, in the interim, suspend
                  the  voting and  distribution  rights  attached  to such Trust
                  Units and make any distribution in respect of such Trust Units
                  by  depositing  such  amount in a separate  bank  account in a
                  Canadian  chartered  bank (net of any applicable  taxes).  Any
                  sale  shall be made on any stock  exchange  on which the Trust
                  Units are then  listed  and,  upon  such  sale,  the  affected
                  holders  shall  cease to be holders of Trust Units so disposed
                  of and their  rights  shall be  limited to  receiving  the net
                  proceeds  of sale,  and any  distribution  in respect  thereof
                  deposited as aforesaid,  net of applicable  taxes and costs of
                  sale,  upon surrender of the  Certificates  representing  such
                  Trust Units;

            (iii) delist the Trust Units from any  non-Canadian  stock exchange;
                  and

            (iv)  take  such  other  actions  as the board of  directors  of the
                  Corporation   determines,   in  its   sole   discretion,   are
                  appropriate in the circumstances that will reduce or limit the
                  number of Trust  Units  held by  non-resident  Unitholders  to
                  ensure  that the  Trust is not  maintained  primarily  for the
                  benefit of non-residents of Canada.

      (e)   The Trustee shall have no liability for amounts received pursuant to
            sales of Trust Units made pursuant to Section 3.8(d)(ii).  Except as
            specifically set out herein, the Trustee shall not be bound to do or
            take any  proceeding  or action with  respect to this Section 3.8 by
            virtue of the  powers  conferred  on it under  this  Declaration  of
            Trust.  The  Trustee  shall  not be  deemed  to have  notice  of any
            violation  of this  Section  3.8  unless and until it has been given
            written  notice of such  violation and shall be required to act only
            as  required  by this  Declaration  of Trust  and upon an  indemnity
            satisfactory to the Trustee being provided by the Trust. The Trustee
            shall not be required to actively monitor the non-resident  holdings
            of the Trust. It is acknowledged that the Trustee cannot monitor the
            non-resident holders of the Trust Units given that many of the Trust
            Units  are  registered  in  the  name  of  depositories   and  other
            non-beneficial holders.

<PAGE>

                                      - 6 -

            The  Trustee   shall  not  be  liable  for  any   violation  of  the
            non-resident  ownership  restriction  in this  Section 3.8 which may
            occur during the term of the Trust.

      (f)   Notwithstanding  any other  provision of this  Declaration of Trust,
            non-resident  Unitholders,  whether registered holders or beneficial
            holders of Trust Units,  shall not be entitled to vote in respect of
            any Special Resolutions to amend this Section 3.8."

                                    ARTICLE 3
                                  MISCELLANEOUS

3.1   Confirmation of Amended and Restated Declaration of Trust

      The  Amended  and  Restated  Declaration  of  Trust  as  amended  by  this
Supplemental Amending Agreement is hereby ratified and confirmed.

3.2   Successors and Assigns

      The provisions of this Supplemental  Amending Agreement shall enure to the
benefit of, and be binding upon,  the parties  hereto and their  successors  and
assigns.

3.3   Counterparts

      This   Supplemental   Amending   Agreement  may  be  executed  in  several
counterparts,  each of which when so executed shall be deemed to be an original,
and such  counterparts  together shall  constitute  one and the same  instrument
which shall be sufficiently evidenced by any such original counterparts.

3.4   Severability

      If any provision of this  Supplemental  Amending  Agreement  shall be held
invalid   or   unenforceable   in   any   jurisdiction,   such   invalidity   or
unenforceability  shall attach only to such provision in such  jurisdiction  and
shall not in any manner affect or render invalid or unenforceable such provision
in any other  jurisdiction or any other provision of this Supplemental  Amending
Agreement in any jurisdiction.

3.5   Time of the Essence

      Time shall be of the essence in this Supplemental Amending Agreement.

<PAGE>

                                      - 7 -

3.6   Governing Law

      This Supplemental Amending Agreement shall be governed by and construed in
accordance  with the laws of the  Province  of  Alberta  and the laws of  Canada
applicable  therein and shall be treated in all  respects as Alberta  contracts.
The parties hereto hereby  irrevocably  submit to the jurisdiction of the courts
of the Province of Alberta.

IN WITNESS  WHEREOF  each of the  parties  hereto has caused  this  Supplemental
Amending Agreement to be duly executed.

                                        PRIMEWEST ENERGY INC.

                                        Per: /s/
                                             -----------------------------------

                                        Per: /s/
                                             -----------------------------------

                                        COMPUTERSHARE TRUST COMPANY OF CANADA

                                        Per: /s/
                                             -----------------------------------

                                        Per: /s/
                                             -----------------------------------EXHIBIT 4.2

                             PRIMEWEST ENERGY TRUST

                                       and

                      COMPUTERSHARE TRUST COMPANY OF CANADA

                                 as Rights Agent

--------------------------------------------------------------------------------

                              AMENDED AND RESTATED
                        UNITHOLDER RIGHTS PLAN AGREEMENT

                                   May 5, 2005

--------------------------------------------------------------------------------

                              STIKEMAN ELLIOTT LLP

<PAGE>

                                    ARTICLE 1
                                 INTERPRETATION

Section 1.1    Certain Definitions.....................................    3
Section 1.2    Currency................................................   17
Section 1.3    Headings................................................   17
Section 1.4    Number and Gender.......................................   17
Section 1.5    Acting Jointly or in Concert............................   17
Section 1.6    Statutory References....................................   17

                                    ARTICLE 2
                                   THE RIGHTS

Section 2.1    Legend on Trust Unit Certificates.......................   17
Section 2.2    Initial Exercise Price; Exercise of Rights; Detachment
               of Rights...............................................   18
Section 2.3    Adjustments to Exercise Price; Number of Rights.........   21
Section 2.4    Date on Which Exercise is Effective.....................   27
Section 2.5    Execution, Authentication, Delivery and Dating of
               Rights Certificates ....................................   28
Section 2.6    Registration, Registration of Transfer and Exchange.....   28
Section 2.7    Mutilated, Destroyed, Lost and Stolen Right
               Certificates ...........................................   29
Section 2.8    Persons Deemed Owners...................................   30
Section 2.9    Delivery and Cancellation of Rights Certificates........   30
Section 2.10   Agreement of Rights Holders.............................   30
Section 2.11   Rights Certificate Holder not Deemed a Unitholder.......   31

                                    ARTICLE 3
                ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN
                                  TRANSACTIONS

Section 3.1    Flip-in Event...........................................   32

                                    ARTICLE 4
                                THE RIGHTS AGENT

Section 4.1    General.................................................   33
Section 4.2    Merger or Amalgamation or Change of Name of Rights
               Agent...................................................   34
Section 4.3    Duties of Rights Agent..................................   34
Section 4.4    Change of Rights Agent..................................   36

                                    ARTICLE 5
                                  MISCELLANEOUS

Section 5.1    Redemption and Waiver...................................   37
Section 5.2    Expiration..............................................   39
Section 5.3    Issuance of New Rights Certificates.....................   39

                                       (i)

<PAGE>

Section 5.4    Supplements and Amendments..............................   40
Section 5.5    Fractional Rights and Fractional Units..................   42
Section 5.6    Rights of Action........................................   42
Section 5.7    Notice of Proposed Actions..............................   42
Section 5.8    Notices.................................................   42
Section 5.9    Successors..............................................   44
Section 5.10   Benefits of this Agreement..............................   44
Section 5.11   Governing Law...........................................   44
Section 5.12   Severability............................................   44
Section 5.13   Effective Date..........................................   44
Section 5.14   Determinations and Actions by the Board of Directors....   45
Section 5.15   Rights of Board, Trust and Offeror......................   45
Section 5.16   Regulatory Approvals....................................   45
Section 5.17   Declaration as to Non-Canadian Holders..................   45
Section 5.18   Time of the Essence.....................................   45
Section 5.19   Contracts of the Trust..................................   46
Section 5.20   Execution in Counterparts...............................   46

                                    SCHEDULE

SCHEDULE "2.2(3)(a)"

                                      (ii)

<PAGE>

                              AMENDED AND RESTATED
                             UNITHOLDER RIGHTS PLAN

      THIS AGREEMENT  dated March 31, 1999 and amended and restated as of May 5,
2005.

BETWEEN:

            PRIMEWEST  ENERGY TRUST, a trust organized under the laws of Alberta
            (the "Trust")

                                       and

            COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company  incorporated
            under the laws of Canada, as Rights Agent (the "Rights Agent", which
            term shall include any successor Rights Agent hereunder)

WITNESSES THAT:

      WHEREAS section 3.2 of the  Declaration of Trust  provides,  in part, that
Trust Units may be issued at the times,  to the persons,  for the  consideration
and on the terms and conditions that the Corporation determines;

      WHEREAS section 8.2 of the Declaration of Trust provides,  in part,  that,
in addition to any other powers and authorities  conferred by the Declaration of
Trust or which the Trustee  may have by virtue of any present or future  statute
or rule of law, the Trustee,  without any action or consent by the  Unitholders,
may exercise the power and authority to issue  additional  Trust Units from time
to time as  directed  by the  Corporation,  which  power  and  authority  may be
exercised by the Trustee from time to time in its sole  judgement and discretion
and in such  manner  and upon such terms and  conditions  as it may from time to
time deem proper;

      WHEREAS section 9.1 of the  Declaration of Trust  provides,  in part, that
the Trustee may grant or delegate to PrimeWest Energy Inc. (the  "Corporation"),
its successors and permitted assigns, as manager of the Trust, such authority as
the Trustee may in its sole discretion deem necessary or desirable to effect the
actual  administration  of the duties of the Trustee  under the  Declaration  of
Trust;

      WHEREAS the delegation to the Corporation of certain duties of the Trustee
under the Declaration of Trust is embodied in an agreement entitled "Amended and
Restated PrimeWest Management Agreement" dated October 16, 1996 and amended

<PAGE>

                                      - 2 -

and restated as of November 6, 2002 between the  Corporation and the Trustee (as
such agreement may be amended from time to time, the "Management Agreement");

      WHEREAS the Management  Agreement  provides,  among other things, that the
Board of  Directors  has sole  authority to make all  decisions  relating to any
offering of Trust Units and that, subject to the foregoing authority and certain
other  provisions set forth in the  Management  Agreement,  the Trustee,  in its
capacity as trustee of the Trust,  has engaged,  appointed  and delegated to the
Corporation  all matters  pertaining  to, among other things,  the Trust and the
Trust Units;

      WHEREAS, prior to adopting a unitholder rights plan (the "Rights Plan") on
March 31, 1999 pursuant to an agreement (the "Original  Agreement")  between the
Trust  and The  Trust  Company  of Bank of  Montreal,  the  Board  of  Directors
determined, after careful consideration of the recommendations received from its
financial and legal advisors,  that it was advisable to adopt the Rights Plan to
ensure,  to the extent  possible,  that all unitholders of the Trust are treated
fairly in connection  with any Take-over Bid and that the Board of Directors and
other appropriate persons have sufficient time to evaluate unsolicited Take-over
Bids and to explore and develop alternatives to maximize unitholder value;

      WHEREAS in order to implement the adoption of the Rights Plan the Board of
Directors authorized the issuance of one Right:

      (i)   effective  at  the  Record  Time  in  respect  of  each  Trust  Unit
            outstanding at the Record Time; and

      (ii)  in respect of each Trust Unit issued after the Record Time and prior
            to the earlier of the Separation Time and the Expiration Time;

      WHEREAS each Right entitles the holder thereof, after the Separation Time,
to  purchase  securities  of the Trust  pursuant to the terms and subject to the
conditions set forth herein;

      WHEREAS the Board of Directors  proposes to amend and restate the Original
Agreement,  and to ensure that the Rights Plan is maintained in accordance  with
the terms and conditions of this Agreement; and

      WHEREAS the Board of Directors  desires to appoint the Rights Agent to act
on behalf of the Trust, and the Rights Agent is willing to so act, in connection
with the issuance,  transfer,  exchange and replacement of Rights  Certificates,
the exercise of Rights and other matters referred to herein;

      NOW  THEREFORE,  in  consideration  of  the  foregoing  premises  and  the
respective  covenants and agreements set forth herein,  the parties hereby agree
as follows:

<PAGE>

                                      - 3 -

                                   ARTICLE 1
                                 INTERPRETATION

Section 1.1 Certain Definitions.

      For  purposes of this  Agreement,  the  following  terms have the meanings
indicated:

      (a)   "Acquiring  Person" means any Person who is the Beneficial  Owner of
            twenty  percent  (20%)  or  more  of the  outstanding  Trust  Units;
            provided,  however,  that  the term  "Acquiring  Person"  shall  not
            include:

            (i)   the Trust or any Subsidiary of the Trust;

            (ii)  any Person who becomes the Beneficial  Owner of twenty percent
                  (20%) or more of the  outstanding  Trust  Units as a result of
                  any  one or a  combination  of  (A)  Trust  Acquisitions,  (B)
                  Permitted Bid Acquisitions,  (C) Pro Rata  Distributions,  (D)
                  Exempt Acquisitions, or (E) Convertible Security Acquisitions;
                  provided,   however,   that  if  a  Person  shall  become  the
                  Beneficial  Owner of twenty percent (20%) or more of the Trust
                  Units  then  outstanding  by  reason  of  one or  more  or any
                  combination of the operation of a Trust Acquisition, Permitted
                  Bid Acquisition, Pro Rata Distribution,  Exempt Acquisition or
                  Convertible   Security   Acquisition  and,  after  such  Trust
                  Acquisition, Permitted Bid Acquisition, Pro Rata Distribution,
                  Exempt  Acquisition  or  Convertible   Security   Acquisition,
                  becomes the Beneficial Owner of an additional one percent (1%)
                  or more of the outstanding  Trust Units other than pursuant to
                  Trust  Acquisitions,  Permitted  Bid  Acquisitions,  Pro  Rata
                  Distributions,  Exempt  Acquisitions  or Convertible  Security
                  Acquisitions,  then as of the date of such  acquisition,  such
                  Person shall become an Acquiring Person;

            (iii) for a period of ten (10) days after the Disqualification  Date
                  (as defined  below),  any Person who  becomes  the  Beneficial
                  Owner of twenty percent (20%) or more of the outstanding Trust
                  Units as a result of such Person  becoming  disqualified  from
                  relying on  Section  1.1(e)(vi)  hereof  solely  because  such
                  Person makes or proposes to make a Take-over Bid in respect of
                  securities  of the  Trust  alone or by  acting  jointly  or in
                  concert  with any  other  Person  (the  first  date of  public
                  announcement  (which,  for the  purposes  of this  definition,
                  shall include,  without limitation, a report filed pursuant to
                  section 176 of the  Securities Act (Alberta )) by or on behalf
                  of such  Person or the Trust of a current  intent to  commence

<PAGE>

                                      - 4 -

                  such  a  Take-over  Bid  being  herein   referred  to  as  the
                  "Disqualification Date"); and

            (iv)  an  underwriter  or member of a banking or selling  group that
                  acquires  Trust  Units  from the  Trust in  connection  with a
                  distribution to the public of securities.

      (b)   "Affiliate"  when used to indicate a  relationship  with a specified
            Person,  means a Person that,  directly or indirectly through one or
            more  intermediaries,  controls,  or is  controlled  by, or is under
            common control with, such specified Person.

      (c)   "Agreement"   means  this   agreement   as   amended,   modified  or
            supplemented from time to time.

      (d)   "Associate"  when used to indicate a  relationship  with a specified
            Person, means any relative of such specified Person who has the same
            home as such specified  Person, or any Person to whom such specified
            Person is married or with whom such specified  Person is living in a
            conjugal  relationship  outside  marriage,  or any  relative of such
            spouse  or  other  Person  who has the same  home as such  specified
            Person.

      (e)   A  Person  shall  be  deemed  the  "Beneficial  Owner",  and to have
            "Beneficial Ownership" of, and to "Beneficially Own":

            (i)   any  securities  of which  such  Person  or any  Affiliate  or
                  Associate of such Person is the owner in law or equity;

            (ii)  any  securities  as to which such Person or any  Affiliate  or
                  Associate of such Person has the right to acquire (A) upon the
                  exercise of any Convertible Securities, or (B) pursuant to any
                  agreement, arrangement or understanding, whether such right is
                  exercisable   immediately  or  within  a  period  of  60  days
                  thereafter and whether or not on condition or the happening of
                  any  contingency  (other than  customary  agreements  with and
                  between  underwriters  and  banking  group  or  selling  group
                  members  with  respect  to a  distribution  of  securities  or
                  pursuant to a pledge of securities  in the ordinary  course of
                  business); and

            (iii) any securities that are Beneficially  Owned within the meaning
                  of  paragraph  (i) or  (ii) of this  definition  by any  other
                  Person with whom such Person is acting jointly or in concert;

            provided, however, that a Person shall not be deemed the "Beneficial
            Owner",  or to have  "Beneficial  Ownership" of, or to "Beneficially

<PAGE>

                                      - 5 -

            Own",  any security as a result of the  existence of any one or more
            of the following circumstances:

            (iv)  such  security has been  deposited  or  tendered,  without any
                  prior agreement or arrangement in respect thereof, pursuant to
                  any tender or  exchange  offer or  take-over  bid made by such
                  Person or made by any Affiliate or Associate of such Person or
                  made by any other  Person  acting  jointly or in concert  with
                  such Person,  unless such  deposited or tendered  security has
                  been taken up or paid for, whichever shall first occur;

            (v)   by reason  of the  holder of such  security  having  agreed to
                  deposit or tender such  security  to a  Take-over  Bid made by
                  such Person or any  Affiliate  or  Associate of such Person or
                  any  other  Person  referred  to in  paragraph  (iii)  of this
                  definition pursuant to a Permitted Lock-up Agreement;

            (vi)  (A)   such Person or any Affiliate or Associate of such Person
                        or any other  Person  acting  jointly or in concert with
                        such  Person,  holds such  security;  provided  that the
                        ordinary   business   of  any  such  Person  (the  "Fund
                        Manager")  includes the  management of investment  funds
                        for others  (which  others may  include or be limited to
                        one or more employee benefit plans or pension plans) and
                        such  security  is  held  by  the  Fund  Manager  in the
                        ordinary  course of such business in the  performance of
                        such Fund Manager's  duties for the account of any other
                        Person (a "Client"),

                  (B)   such Person (the "Trust  Company")  is licensed to carry
                        on the business of a trust company under  applicable law
                        and, as such, acts as trustee or  administrator  or in a
                        similar  capacity in relation to the estates of deceased
                        or incompetent  Persons or in relation to other accounts
                        and holds such  security in the ordinary  course of such
                        duties   for  the  estate  of  any  such   deceased   or
                        incompetent  Person  (each an "Estate  Account")  or for
                        such other accounts (each an "Other Account"),

                  (C)   such Person  (the  "Statutory  Body") is an  independent
                        Person established by statute for purposes that include,
                        and the  ordinary  business  or  activity of such Person
                        includes,   the  management  of  investment   funds  for
                        employee benefit plans,  pension plans,  insurance plans
                        of various  public bodies and the  Statutory  Body holds
                        such  security  for the  purposes of its  activities  as
                        such,

<PAGE>

                                      - 6 -

                  (D)   the ordinary business of any such Person includes acting
                        as an agent of the  Crown in the  management  of  public
                        assets (the "Crown Agent"), or

                  (E)   the Person, any Affiliate or Associate of such Person or
                        any other Person acting  jointly or in concert with such
                        Person holds such security,  provided that the Person is
                        the  administrator or the trustee of one or more pension
                        funds or plans (each a "Pension Fund")  registered under
                        the laws of Canada or any province thereof or the United
                        States or any state thereof (the "Independent  Person"),
                        or is a Pension  Fund and holds such  securities  solely
                        for the  purposes of its  activities  as an  Independent
                        Person or as a Pension Fund,  and further  provided that
                        such Person does not hold more than thirty percent (30%)
                        of the Trust Units;

                  provided,  however,  that in any of the foregoing cases no one
                  of the Fund Manager,  the Trust Company,  the Statutory  Body,
                  the Crown Agent,  the  Independent  Person or the Pension Fund
                  makes  or  proposes  to make a  Take-over  Bid in  respect  of
                  securities  of the  Trust  alone or by  acting  jointly  or in
                  concert with any other Person (other than by means of ordinary
                  market transactions  (including  pre-arranged trades) executed
                  through  the  facilities  of a  stock  exchange  or  organized
                  over-the-counter market);

            (vii) such  Person is a Client of the same Fund  Manager  as another
                  Person on whose account the Fund Manager holds such  security,
                  or such Person is an Estate Account or an Other Account of the
                  same  Trust  Company as another  Person on whose  account  the
                  Trust Company holds such security, or such Person is a Pension
                  Fund with the same Independent Person as another Pension Fund;

            (viii)such Person is a Client of a Fund  Manager  and such  security
                  is owned at law or in  equity  by the  Fund  Manager,  or such
                  Person is an Estate  Account  or an Other  Account  of a Trust
                  Company and such  security is owned at law or in equity by the
                  Trust  Company,  or such  Person  is a  Pension  Fund and such
                  security  is  owned  at law or in  equity  by the  Independent
                  Person or the Pension Fund; or

            (ix)  such Person is a registered  holder of  securities as a result
                  of carrying on the  business  of, or acting as a nominee of, a
                  securities depository.

<PAGE>

                                      - 7 -

            For  purposes  of this  Agreement,  the  percentage  of Trust  Units
            Beneficially  Owned by any  Person  shall be and be deemed to be the
            product of one hundred  (100) and a fraction of which the  numerator
            is the number of votes for the election of all  directors  generally
            attaching to the Trust Units  Beneficially  Owned by such Person and
            the  denominator of which is the number of votes for the election of
            all directors  generally  attaching to all outstanding  Trust Units.
            Where any Person is deemed to Beneficially Own unissued Trust Units,
            such Trust  Units shall be deemed to be issued and  outstanding  for
            the  purpose  of   calculating   the   percentage   of  Trust  Units
            Beneficially Owned by such Person.

      (f)   "Board of Directors"  means, at any time, the duly constituted board
            of directors of the Corporation.

      (g)   "Business Day" means any day other than a Saturday,  Sunday or a day
            on which banking institutions in Calgary,  Alberta are authorized or
            obligated by law to close.

      (h)   "close of  business"  on any given  date means the time on such date
            (or,  if such  date is not a  Business  Day,  the  time on the  next
            succeeding  Business Day) at which the office of the transfer  agent
            for the Trust Units in Calgary (or, after the  Separation  Time, the
            office of the Rights Agent in Calgary) is closed to the public.

      (i)   "Competing  Arrangement" means a transaction or arrangement proposed
            by the Trust  requiring the approval of  Unitholders  which involves
            the restructuring or dissolution of the Trust or the distribution of
            all  or a  significant  portion  of  the  assets  of  Trust  to  its
            Unitholders,  whether  before or after the sale or  conversion  into
            cash or securities of all or a significant  portion of the assets of
            the Trust.

      (j)   "Competing  Bid"  means a  Take-over  Bid  that:  (i) is made  while
            another  Permitted Bid is in existence,  and (ii)  satisfies all the
            components  of the  definition of a Permitted  Bid,  except that the
            requirements  set out in paragraph of the  definition of a Permitted
            Bid shall be satisfied if the Take-over Bid shall  contain,  and the
            take up and payment for securities tendered or deposited  thereunder
            shall be subject to, an irrevocable and  unqualified  condition that
            no  Trust  Units  shall be  taken  up or paid  for  pursuant  to the
            Competing  Bid prior to the close of business on the date that is no
            earlier  than the date  which is the later of  twenty-one  (21) days
            after the date the  Competing  Bid is made or the  earliest  date on
            which  Trust  Units  may be  taken up or paid for  under  any  other
            Permitted  Bid that is then in existence  for the Trust  Units,  and
            only if at that  date  more  than  fifty  percent  (50%) of the then
            outstanding  Trust Units held by
<PAGE>

                                      - 8 -

            Independent Unitholders have been deposited to the Competing Bid and
            not withdrawn.

      (k)   A Person is "controlled" by another Person if:

            (i)   in the case of a corporation,  securities  entitled to vote in
                  the election of directors of such  corporation  carrying  more
                  than  fifty  percent  (50%) of the votes for the  election  of
                  directors  are held,  directly  or  indirectly,  by or for the
                  benefit  of the other  Person,  and the votes  carried by such
                  securities are entitled, if exercised,  to elect a majority of
                  the board of directors of such corporation; or

            (ii)  in the case of a Person which is not a corporation,  more than
                  fifty percent (50%) of the voting or equity  interests of such
                  Person are held, directly or indirectly, by or for the benefit
                  of the other Person;

            and "controls",  "controlling" and "under common control with" shall
            be interpreted accordingly.

      (l)   "Convertible Security" means at any time:

            (i)   any right  (regardless  of whether  such right  constitutes  a
                  security),  other than the Rights, to acquire Trust Units from
                  the Trust; and

            (ii)  any  securities  issued by the Trust from time to time  (other
                  than the Rights) carrying any exercise, conversion or exchange
                  right;

            which is then exercisable or exercisable  within a period of 60 days
            from that time  pursuant  to which the holder  thereof  may  acquire
            Trust  Units or  other  securities  which  are  convertible  into or
            exercisable or exchangeable  for Trust Units (in each case,  whether
            such right is then exercisable or exercisable  within a period of 60
            days from that time and whether or not on condition or the happening
            of any contingency).

      (m)   "Convertible  Security  Acquisition"  means the acquisition of Trust
            Units upon the  exercise  of  Convertible  Securities  received by a
            Person pursuant to a Permitted Bid Acquisition,  Exempt  Acquisition
            or a Pro Rata Distribution.

      (n)   "Corporation" means PrimeWest Energy Inc., a corporation amalgamated
            under the laws of Alberta.

      (o)   "Declaration  of Trust" means the  declaration  of trust dated as of
            August 2, 1996,  restated  November 6, 2002 and amended as of May 6,

<PAGE>

                                     - 9 -

            2004,  as further  amended from time to time,  pursuant to which the
            Trust was organized.

      (p)   "Disqualification  Date" has the meaning ascribed thereto in Section
            1.1(a)(iii) hereof.

      (q)   "Effective  Date" has the meaning  ascribed  thereto in Section 5.13
            hereof.

      (r)   "Election to Exercise" has the meaning  ascribed  thereto in Section
            2.2(4) hereof.

      (s)   "Exempt Acquisition" means an acquisition of Trust Units:

            (i)   in  respect  of which the Board of  Directors  has  waived the
                  application  of Section 3.1 hereof  pursuant to the provisions
                  of Section 5.1(2), Section 5.1(3) or Section 5.1(4) hereof;

            (ii)  which was made on or prior to the Record Time;

            (iii) which was made pursuant to a distribution reinvestment plan of
                  the Trust;

            (iv)  pursuant  to a  distribution  by the  Trust of Trust  Units or
                  Convertible Securities made pursuant to a prospectus; or

            (v)   pursuant  to a  distribution  by the  Trust of Trust  Units or
                  Convertible  Securities  by way of a private  placement by the
                  Trust,   provided  that  (A)  all  necessary   stock  exchange
                  approvals for such private  placement have been obtained,  and
                  such private placement  complies with the terms and conditions
                  of such  approvals,  and (B) the purchaser does not become the
                  Beneficial   Owner  of  more  than  25%  of  the  Trust  Units
                  outstanding immediately prior to the private placement (and in
                  making this determination, the securities to be issued to such
                  purchaser on the private  placement shall be deemed to be held
                  by such  purchaser  but shall not be included in the aggregate
                  number of  outstanding  Trust Units  immediately  prior to the
                  private placement).

      (t)   "Exercise  Price" means, as of any date, the price at which a holder
            may  purchase the  securities  issuable  upon  exercise of one whole
            Right. Until adjustment thereof in accordance with the terms hereof,
            the Exercise Price shall be $100.00.

      (u)   "Expiration Time" means the earlier of:

<PAGE>

                                     - 10 -

            (i)   the time at which the right to exercise Rights shall terminate
                  pursuant to Section 5.1(1) or Section 5.1(5) hereof; and

            (ii)  the  close  of  business  on the date of  termination  of this
                  Agreement pursuant to Section 5.13.

      (v)   "Flip-in  Event"  means a  transaction  in or  pursuant to which any
            Person becomes an Acquiring Person.

      (w)   "Independent Unitholders" means holders of Trust Units excluding:

            (i)   any Acquiring Person;

            (ii)  any  Person  (other  than  a  Person  referred  to in  Section
                  1.1(e)(vi) that is making or has announced a current intention
                  to make a Take-over Bid for Trust Units (including a Permitted
                  Bid) but  excluding  any such Person if the  Take-over  Bid so
                  announced   or  made  by  such  Person  has  been   withdrawn,
                  terminated or, expired;

            (iii) any Affiliate or Associate of such Acquiring  Person or Person
                  referred to in paragraph (ii) of this definition;

            (iv)  any Person  acting  jointly or in concert with such  Acquiring
                  Person  or  Person  referred  to in  paragraph  (ii)  of  this
                  definition; or

            (v)   a Person who is a trustee of any employee  benefit plan, Trust
                  Unit  purchase  plan,  deferred  profit  sharing  plan  or any
                  similar  plan or trust for the  benefit  of  employees  of the
                  Trust,  the  Corporation  or a  Subsidiary  of either of them,
                  unless  the  beneficiaries  of the  plan or trust  direct  the
                  manner  in which  the  Trust  Units  are to be voted or direct
                  whether the Trust Units are to be tendered to a Take-over Bid.

      (x)   "Market  Price"  per  security  of any  securities  on any  date  of
            determination  means the  average  of the daily  closing  prices per
            security of such securities  (determined as described below) on each
            of the twenty (20)  consecutive  Trading Days through and  including
            the Trading Day immediately preceding such date; provided,  however,
            that if an event of a type analogous to any of the events  described
            in Section 2.3 hereof  shall have caused the closing  prices used to
            determine  the  Market  Price  on any  Trading  Day not to be  fully
            comparable with the closing price on such date of determination  or,
            if  the  date  of  determination  is  not  a  Trading  Day,  on  the
            immediately  preceding  Trading Day, then each such closing price so
            used shall be  appropriately  adjusted in a manner  analogous to the
            applicable adjustment provided for in Section 2.3 hereof in order to
            make

<PAGE>

                                     - 11 -

            it  fully  comparable  with  the  closing  price  on  such  date  of
            determination or, if the date of determination is not a Trading Day,
            on the  immediately  preceding  Trading Day.  The closing  price per
            security of any  securities  on any date shall be the closing  board
            lot sale price or, if such price is not  available,  the  average of
            the closing bid and asked prices, for such securities as reported by
            The Toronto Stock Exchange;  provided,  however, that if on any such
            date the  securities  are not traded on The Toronto Stock  Exchange,
            the closing price per security of such securities on such date shall
            mean the fair value per security of such  securities on such date as
            determined  in  good  faith  by  the  Board  of   Directors,   after
            consultation  with  a  nationally  or   internationally   recognized
            investment  dealer or investment  banker.  The Market Price shall be
            expressed in Canadian dollars.  Notwithstanding the foregoing, where
            the  Board  of  Directors  is  satisfied  that the  Market  Price of
            securities as determined  herein was affected by an  anticipated  or
            actual  Take-over  Bid or by  improper  manipulation,  the  Board of
            Directors may,  acting in good faith,  determine the Market Price of
            securities,  such  determination  to be based on a finding as to the
            price at which a holder of securities of that class could reasonably
            have expected to dispose of his securities  immediately prior to the
            relevant date excluding any change in price reasonably  attributable
            to the  anticipated  or  actual  Take-over  Bid  or to the  improper
            manipulation, as applicable.

      (y)   "Offer to Acquire" shall include:

            (i)   an offer to purchase, a public announcement of an intention to
                  make an offer to purchase,  or a  solicitation  of an offer to
                  sell, Trust Units; and

            (ii)  an acceptance of an offer to sell Trust Units,  whether or not
                  such offer to sell has been solicited;

            or any  combination  thereof,  and the Person  accepting an offer to
            sell  shall be deemed to be making an Offer to Acquire to the Person
            that made the offer to sell.

      (z)   "Offeror"  means a Person who has announced an intention to make, or
            who makes and has outstanding, a Take-over Bid.

      (aa)  "Offeror's  Securities" means Trust Units  Beneficially  Owned by an
            Offeror,  any  Affiliate or Associate  of such  Offeror,  any Person
            acting  jointly or in concert with the Offeror or with any Affiliate
            of the Offeror and any  Affiliates  or  Associates of such Person so
            acting jointly or in concert.

<PAGE>

                                     - 12 -

      (bb)  "Permitted  Bid" means a  Take-over  Bid made by an Offeror  that is
            made by means of a take-over  bid circular  and which also  complies
            with the following additional provisions:

            (i)   the  Take-over  Bid shall be made to all  holders of record of
                  Trust  Units,  other  than  the  Offeror,   any  Affiliate  or
                  Associate  of the Offeror or any Person  acting  jointly or in
                  concert with the Offeror,  wherever resident, as registered on
                  the books of the Trust;

            (ii)  the Take-over Bid shall  contain,  and the take up and payment
                  for  securities  tendered  or  deposited  thereunder  shall be
                  subject to, an irrevocable and  unqualified  condition that no
                  Trust  Units  shall be taken  up or paid for  pursuant  to the
                  Take-over Bid prior to the close of business on the date which
                  is not less than  forty-five  (45) days  following the date of
                  the Take-over Bid and that no Trust Units shall be taken up or
                  paid for pursuant to the Take-over  Bid unless,  at such date,
                  more than fifty  percent (50%) of the then  outstanding  Trust
                  Units held by Independent  Unitholders  have been deposited to
                  the Take-over Bid and not withdrawn;

            (iii) the Take-over Bid shall contain an irrevocable and unqualified
                  provision  that,  unless the  Take-over  Bid is  withdrawn  in
                  accordance  with  applicable law, Trust Units may be deposited
                  pursuant to such  Take-over  Bid at any time during the period
                  of time  described in paragraph  (ii) of this Section  1.1(bb)
                  and that any Trust Units  deposited  pursuant to the Take-over
                  Bid may be withdrawn at any time until taken up and paid for;

            (iv)  the Take-over Bid shall contain an irrevocable and unqualified
                  condition   that  more  than  fifty   percent   (50%)  of  the
                  outstanding  Trust  Units  held  by  Independent  Unitholders,
                  determined  as at the date of first  take-up  or  payment  for
                  Trust Units under the Take-over  Bid, must be deposited to the
                  Take-over  Bid and not  withdrawn  at the close of business on
                  the date of first take-up or payment for Trust Units; and

            (v)   the Take-over Bid shall contain an irrevocable and unqualified
                  provision  that in the  event  that  more than 50% of the then
                  outstanding Trust Units held by Independent  Unitholders shall
                  have been  deposited to the Take-over Bid and not withdrawn as
                  at the date of first  take-up or payment for Trust Units under
                  the Take-over Bid, the Offeror will make a public announcement
                  of that  fact  and the  Take-over  Bid  will  remain  open for
                  deposits  and

<PAGE>

                                     - 13 -

                  tenders of Trust Units for not less than 10 Business Days from
                  the date of such public announcement.

      (cc)  "Permitted Bid Acquisitions"  means acquisitions of Trust Units made
            pursuant to a Permitted Bid or a Competing Bid.

      (dd)  "Permitted  Lock-up  Agreement" means an agreement  between a Person
            and one or more  holders of Trust  Units or  Convertible  Securities
            (the terms of which are  publicly  disclosed  and reduced to writing
            and a copy of which is made  available to the public  (including the
            Trust) not later than the date the Lock-up Bid (as defined below) is
            publicly  announced) pursuant to which such holders agree to deposit
            or tender Trust Units or  Convertible  Securities to a Take-over Bid
            (the  "Lock-up  Bid")  made by the  Person  or any of such  Person's
            Affiliates  or  Associates  or  any  other  Person  referred  to  in
            paragraph  (iii) of the  definition  of  Beneficial  Owner and which
            provides:

            (i)   that any  agreement  to deposit  or tender or to not  withdraw
                  Trust Units or Convertible  Securities from the Lock-up Bid is
                  terminable at the option of any holder if:

                  (A)   another Take-over Bid or a Competing Arrangement is made
                        for Trust Units or Convertible Securities prior to Trust
                        Units or Convertible  Securities being taken up and paid
                        for under the  Lock-up Bid at a price or value per Trust
                        Unit  or  Convertible  Security  that  is a  least  five
                        percent  (5%) in  excess of the price or value per Trust
                        Unit or Convertible  Security  offered under the Lock-up
                        Bid; or

                  (B)   another Take-over Bid or a Competing Arrangement is made
                        prior to the Trust Units or Convertible Securities being
                        taken up and paid for under the Lock-up Bid for a number
                        of Trust Units or  Convertible  Securities at least five
                        percent  (5%)  greater than the number of Trust Units or
                        Convertible  Securities  that the Offeror has offered to
                        purchase  under the  Lock-up Bid at a price or value per
                        Trust Unit or Convertible Security that is not less than
                        the  price  or  value  per  Trust  Unit  or  Convertible
                        Security offered under the Lock-up Bid; and

            (ii)  no "break-up"  fees,  "top-up"  fees,  penalties,  expenses or
                  other amounts that exceed in the aggregate the cash equivalent
                  of two and one  half  percent  (2.5%)  of the  price  or value
                  payable under the Lock-up Bid to the holders of Trust Units or
                  Convertible Securities who are party to the agreement shall be
                  payable  pursuant  to the

<PAGE>

                                     - 14 -

                  agreement   in  the  event  that  the   Lock-up   Bid  is  not
                  successfully  concluded or if any holder fails to tender Trust
                  Units or Convertible Securities pursuant thereto.

      (ee)  "Person"  means  any  individual,  firm,  partnership,  association,
            trust,   trustee,   executor,   administrator,   legal  or  personal
            representative,  government, governmental body, entity or authority,
            group, body corporate,  corporation,  unincorporated organization or
            association,  syndicate,  joint venture or any other entity, whether
            or not having  legal  personality,  and any of the  foregoing in any
            derivative, representative or fiduciary capacity and pronouns have a
            similar extended meaning.

      (ff)  "Pro Rata Distribution" means an acquisition as a result of:

            (i)   a  distribution  of Trust Units or a Trust Unit split or other
                  event  pursuant to which a Person  receives or acquires  Trust
                  Units or Convertible  Securities on the same pro rata basis as
                  all other holders of Trust Units of the same class; or

            (ii)  any other  event  pursuant to which all holders of Trust Units
                  are entitled to receive Trust Units or Convertible  Securities
                  on  a  pro  rata  basis,   including,   without  limiting  the
                  generality  of  the  foregoing,  pursuant  to the  receipt  or
                  exercise of rights issued by the Trust and  distributed to all
                  the holders of a series or class of Trust  Units to  subscribe
                  for or purchase Trust Units or  Convertible  Securities of the
                  Trust,  provided  that such rights are acquired  directly from
                  the Trust and not from any other Person.

      (gg)  "Record Time" means 11:59 p.m. (Calgary time) on March 31, 1999.

      (hh)  "Redemption  Price"  has the  meaning  ascribed  thereto  in Section
            5.1(1) hereof.

      (ii)  "regular periodic cash distributions"  means cash distributions paid
            at regular  intervals  in any fiscal year of the Trust to the extent
            that such cash  distributions do not exceed,  in the aggregate,  the
            greatest of:

            (i)   three hundred  percent (300%) of the aggregate  amount of cash
                  distributions declared payable by the Trust on its Trust Units
                  in its immediately preceding fiscal year; and

            (ii)  one hundred percent (100%) of the aggregate  consolidated  net
                  income  of the  Trust,  before  extraordinary  items,  for its
                  immediately preceding fiscal year.

<PAGE>

                                     - 15 -

      (jj)  "Right" means a right issued pursuant to this Agreement.

      (kk)  "Rights  Certificate"  has the meaning  ascribed  thereto in Section
            2.2(3) hereof.

      (ll)  "Rights Register" has the meaning ascribed thereto in Section 2.6(1)
            hereof.

      (mm)  "Securities Act (Alberta)" means the Securities Act, R.S.A. 2000, c.
            S-4, as amended, and the regulations,  rules,  policies, and notices
            thereunder,  and any  comparable  or  successor  laws,  regulations,
            rules, policies or notices thereto.

      (nn)  "Separation  Time" means the close of  business on the tenth  (10th)
            Trading Day after the earlier of:

            (i)   the Trust Unit Acquisition Date; and

            (ii)  the date of the commencement of, or first public  announcement
                  of,  the  intent of any  Person  (other  than the  Trust,  the
                  Corporation  or any Subsidiary of either of them) to commence,
                  a Take-over Bid (other than a Permitted Bid or Competing  Bid)
                  or  such  later  date as may be  determined  by the  Board  of
                  Directors;

            provided that:

            (iii) if any  Take-over  Bid referred to in  paragraph  (ii) of this
                  Section 1.1(nn) expires, is cancelled, terminated or otherwise
                  withdrawn  prior to the Separation  Time,  then such Take-over
                  Bid shall be deemed, for the purposes of this Section 1.1(nn),
                  never to have been made;

            (iv)  if the  Board of  Directors  determines  pursuant  to  Section
                  5.1(2),  Section  5.1(3) or Section 5.1(4) hereof to waive the
                  application of Section 3.1 hereof to a Flip-in Event, then the
                  Separation  Time in respect  of such  Flip-in  Event  shall be
                  deemed never to have occurred; and

            (v)   if the foregoing results in the Separation Time being prior to
                  the Record Time,  then the Separation Time shall be the Record
                  Time.

      (oo)  "Subsidiary":  a corporation shall be deemed to be a Subsidiary of a
            Person if:

            (i)   it is controlled by:

<PAGE>

                                     - 16 -

                  (A)   that Person;

                  (B)   that Person and one or more  corporations  each of which
                        is controlled by that Person; or

                  (C)   two or more  corporations each of which is controlled by
                        that Person; or

            (ii)  it is a  Subsidiary  of a  corporation  that is that  Person's
                  Subsidiary.

      (pp)  "Take-over  Bid" means an Offer to Acquire Trust Units or securities
            convertible into or exchangeable for or carrying a right to purchase
            Trust Units  where the Trust Units  subject to the Offer to Acquire,
            together with the Trust Units into which the  securities  subject to
            the Offer to Acquire are  convertible,  exchangeable or exercisable,
            and the Offeror's  Securities,  constitute  in the aggregate  twenty
            percent (20%) or more of the outstanding  Trust Units at the date of
            the Offer to Acquire.

      (qq)  "Trading Day", when used with respect to any securities, means a day
            on which the principal  Canadian  stock  exchange or market on which
            such  securities  are listed or  admitted to trading is open for the
            transaction  of  business  or, if the  securities  are not listed or
            admitted to trading on any  Canadian  stock  exchange  or market,  a
            Business Day.

      (rr)  "Trust   Acquisition"  means  an  acquisition  by  the  Trust  or  a
            Subsidiary  of the  Trust or the  redemption  by the  Trust of Trust
            Units  which,  by reducing  the number of Trust  Units  outstanding,
            increases the proportionate number of Trust Units Beneficially Owned
            by any Person.

      (ss)  "Trust  Unit  Acquisition  Date"  means  the  first  date of  public
            announcement (which, for purposes of this definition, shall include,
            without  limitation,  a report filed  pursuant to section 141 of the
            Securities Act (Alberta)) by or on behalf of the Trust or an Offeror
            or Acquiring  Person of facts indicating that a Person has become an
            Acquiring Person.

      (tt)  "Trust  Units"  means  the  trust  units  of the  Trust,  each  unit
            representing an equal undivided beneficial interest in the Trust, as
            constituted at the date hereof,  and any other security of the Trust
            into  which  such  Trust  Units  may  be  subdivided,  consolidated,
            reclassified or changed;  provided,  however,  that any reference to
            Trust Units issued upon the exercise of Rights shall mean fully-paid
            Trust Units of the Trust.

      (uu)  "Trustee"  means  Computershare  Trust  Company  of  Canada,  in its
            capacity as trustee of the Trust or any successor  trustee appointed
            by Unitholders.

<PAGE>

                                     - 17 -

Section 1.2 Currency.

      All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada, unless otherwise specified.

Section 1.3 Headings.

      The division of this Agreement into Articles, Sections and Clauses and the
insertion of headings,  subheadings  and a table of contents are for convenience
of reference only and shall not affect the  construction  or  interpretation  of
this Agreement.

Section 1.4 Number and Gender.

      Wherever the context so requires, terms used herein importing the singular
number only shall include the plural and vice-versa and words importing only one
gender shall include all others.

Section 1.5 Acting Jointly or in Concert.

      For purposes of this  Agreement,  a Person is acting jointly or in concert
with every Person who is a party to an agreement,  commitment or  understanding,
whether formal or informal and whether or not in writing,  with the first Person
or any  Associate  or  Affiliate  of such Person for the purpose of acquiring or
making an Offer to Acquire Trust Units (other than customary agreements with and
between  underwriters  or banking  group  members or selling  group members with
respect to a  distribution  of  securities  or to a pledge of  securities in the
ordinary course of business).

Section 1.6 Statutory References.

      Unless the  context  otherwise  requires or except as  expressly  provided
herein, any reference herein to a specific part, section,  clause or rule of any
statute or regulation shall be deemed to refer to the same as it may be amended,
re-enacted  or  replaced  or,  if  repealed  and there  shall be no  replacement
therefor, to the same as it is in effect on the date of this Agreement.

                                    ARTICLE 2
                                   THE RIGHTS

Section 2.1 Legend on Trust Unit Certificates.

(1)   Certificates issued for Trust Units after the Record Time but prior to the
      close of business on the earlier of the Separation Time and the Expiration
      Time shall evidence one Right for each Trust Unit represented  thereby and
      shall have impressed on,  printed on,  written on or otherwise  affixed to
      them, a legend in substantially the following form:

            "Until the  Separation  Time (as defined in the Rights Plan referred
            to below), this certificate also evidences and entitles the holder

<PAGE>

                                     - 18 -

            hereof to  certain  Rights as set forth in an Amended  and  Restated
            Unitholder Rights Plan Agreement,  dated May 5, 2005, as amended and
            restated from time to time (the "Rights  Plan"),  between  PrimeWest
            Energy Trust (the "Trust") and Computershare Trust Company of Canada
            as rights agent (the "Rights Agent"),  the terms of which are hereby
            incorporated  herein by reference  and a copy of which is on file at
            the registered office of the Trust. Under certain circumstances,  as
            set  forth  in the  Rights  Plan,  such  Rights  may be  amended  or
            redeemed,  may  expire,  may  become  null and void (if,  in certain
            cases, they are issued to or "Beneficially  Owned" by any Person who
            is, was or becomes an "Acquiring  Person", as such terms are defined
            in the Rights Plan,  whether  currently held by or on behalf of such
            Person or any  subsequent  holder) or may be  evidenced  by separate
            certificates and may no longer be evidenced by this certificate.

            The Trust  will mail or  arrange  for the  mailing  of a copy of the
            Rights Plan to the holder of this  certificate  without  charge upon
            receipt of a written request therefor."

(2)   In the event the Trust  shall at any time after the Record  Time and prior
      to  the  Separation  Time  issue  any  Trust  Units  otherwise  than  in a
      transaction  referred to in Section 2.3(a), each such Trust Unit so issued
      shall  automatically  have one new Right  associated  with it, which Right
      shall be evidenced by such Trust Unit.

(3)   Until  the  earlier  of the  Separation  Time  and  the  Expiration  Time,
      certificates  representing  Trust Units that are issued and outstanding at
      the Record  Time shall  evidence  one Right for each Trust Unit  evidenced
      thereby notwithstanding the absence of the foregoing legend.

Section 2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights.

(1)   Right to entitle  holder to purchase  one Trust Unit prior to  adjustment.
      Subject to  adjustment  as herein set forth and subject to Section  3.1(1)
      hereof,  each Right will  entitle the holder  thereof,  from and after the
      Separation  Time and prior to the  Expiration  Time, to purchase,  for the
      Exercise  Price as at the Business Day  immediately  preceding the date of
      exercise  of the Right,  one Trust Unit  (which  price and number of Trust
      Units are  subject to  adjustment  as set forth  below and are  subject to
      Section  3.1(1)  hereof).  Notwithstanding  any  other  provision  of this
      Agreement,  any Rights held by the Trust and any of its Subsidiaries shall
      be void.

(2)   Rights not exercisable  until  Separation Time. Until the Separation Time,
      (i) the Rights shall not be exercisable and no Right may be exercised, and
      (ii) for  administrative  purposes,  each Right will be  evidenced  by the
      certificates for the

<PAGE>

                                     - 19 -

      associated  Trust Units  registered  in the names of the  holders  thereof
      (which  certificates  shall also be deemed to be Rights  Certificates) and
      will be  transferable  only together  with,  and will be  transferred by a
      transfer of, such associated Trust Units.

(3)   Delivery of Rights  Certificate and disclosure  statement.  From and after
      the Separation Time and prior to the Expiration Time, (i) the Rights shall
      be exercisable, and (ii) the registration and transfer of the Rights shall
      be separate from, and independent of, Trust Units.  Promptly following the
      Separation Time, the Trust will prepare, or cause to be prepared,  and the
      Rights  Agent  will  mail to each  holder  of  record  of Rights as of the
      Separation  Time  (other than an  Acquiring  Person and, in respect of any
      Rights  Beneficially  Owned by such Acquiring Person which are not held of
      record by such  Acquiring  Person,  the holder of record of such Rights (a
      "Nominee")) at such holder's  address as shown by the records of the Trust
      (the Trust hereby agreeing to furnish copies of such records to the Rights
      Agent for this purpose):

      (a)   a certificate (a "Rights  Certificate") in substantially the form of
            Schedule "2.2(3)(a)" hereto,  appropriately completed,  representing
            the number of Rights held by such holder at the Separation Time, and
            having such marks of identification or designation and such legends,
            summaries  or  endorsements  printed  thereon  as the Trust may deem
            appropriate and as are not inconsistent  with the provisions of this
            Agreement,  or as may be  required  to  comply  with any law,  rule,
            regulation or judicial or  administrative  order or with any rule or
            regulation  made pursuant  thereto or with any rule or regulation of
            any self-regulatory organization, stock exchange or quotation system
            on which the Rights may from time to time be listed or traded, or to
            conform to usage; and

      (b)   a disclosure statement describing the Rights;

      provided  that a  Nominee  shall be sent  the  materials  provided  for in
      paragraphs  (a) and (b) in respect of all Trust Units held of record by it
      which are not Beneficially  Owned by an Acquiring Person. In order for the
      Trust to  determine  whether  any Person is holding  Trust Units which are
      Beneficially  Owned by another  Person,  the Trust may require  such first
      mentioned Person to furnish it with such information and  documentation as
      the Trust considers advisable.

(4)   Exercise  of Rights.  Rights may be  exercised  in whole or in part on any
      Business Day after the Separation Time and prior to the Expiration Time by
      submitting  to the Rights  Agent the Rights  Certificate  evidencing  such
      Rights  together with an election to exercise such Rights (an "Election to
      Exercise")  substantially in the form attached to the Rights  Certificate,
      duly completed, accompanied by

<PAGE>

                                     - 20 -

      payment by certified cheque,  banker's draft or money order payable to the
      order of the Trust, of a sum equal to the Exercise Price multiplied by the
      number  of  Rights  being  exercised  and a sum  sufficient  to cover  any
      transfer  tax or charge  which may be payable  in respect of any  transfer
      involved  in the  transfer  or  delivery  of  Rights  Certificates  or the
      issuance or delivery of certificates  for Trust Units in a name other than
      that of the holder of the Rights being  exercised,  all of the above to be
      received  before the Expiration  Time by the Rights Agent at its principal
      office in any of the cities listed on the Rights Certificate.

(5)   Duties of Rights Agent upon receipt of Election to Exercise.  Upon receipt
      of a Rights Certificate,  which is accompanied by (i) a completed and duly
      executed  Election to  Exercise,  and (ii) payment as set forth in Section
      2.2(4) above, the Rights Agent (unless otherwise  instructed by the Trust)
      will thereupon promptly:

      (a)   requisition from the transfer agent for the Trust Units certificates
            representing the number of Trust Units to be purchased and directing
            such transfer agent to make such account settlement  arrangements as
            may be  necessary  (the Trust  hereby  irrevocably  authorizing  its
            transfer agent to comply with all such requisitions and directions);

      (b)   when  appropriate,  requisition from the Trust the amount of cash to
            be paid in lieu of issuing fractional Trust Units;

      (c)   after receipt of such certificates,  deliver the same to or upon the
            order  of  the  registered   holder  of  such  Rights   Certificate,
            registered  in  such  name or  names  as may be  designated  by such
            registered holder;

      (d)   when appropriate, after receipt, deliver such cash (less any amounts
            required to be withheld) to or to the order of the registered holder
            of the Rights Certificate; and

      (e)   tender to the Trust all payments received on exercise of the Rights.

(6)   Partial  Exercise  of  Rights.  In case the  holder  of any  Rights  shall
      exercise  less than all of the Rights  evidenced by such  holder's  Rights
      Certificate,  a new Rights  Certificate  evidencing  the Rights  remaining
      unexercised  will be issued by the Rights  Agent to such holder or to such
      holder's duly authorized assigns.

(7)   Duties of the Trust. The Trust covenants and agrees that it will:

      (a)   take all such  action as may be  necessary  and  within its power to
            ensure  that all  Trust  Units or other  securities  delivered  upon
            exercise  of  Rights   shall,   at  the  time  of  delivery  of  the
            certificates for such securities (subject to payment of the Exercise
            Price),  be  duly  and  validly  authorized,  executed,  issued  and
            delivered and fully paid and non-assessable;

<PAGE>

                                     - 21 -

      (b)   take all such  action as may be  necessary  and  within its power to
            ensure   compliance  with  the  provisions  of  Section  3.1  hereof
            including,  without  limitation,  all such action to comply with any
            applicable  requirements  of the  Securities  Act  (Alberta) and any
            applicable  comparable   securities   legislation  of  each  of  the
            provinces  of  Canada  and  any  other   applicable   law,  rule  or
            regulation,  in  connection  with the  issuance  and delivery of the
            Rights  Certificates  and the  issuance  of any Trust Units or other
            securities upon exercise of Rights;

      (c)   use  reasonable  efforts  to cause,  from and after such time as the
            Rights become  exercisable,  all Trust Units issued upon exercise of
            Rights to be listed upon issuance on the principal stock exchange on
            which  the  Trust  Units  were  traded   prior  to  the  Trust  Unit
            Acquisition Date;

      (d)   cause to be reserved and kept  available out of its  authorized  and
            unissued Trust Units, the number of Trust Units that, as provided in
            this  Agreement,  will from time to time be sufficient to permit the
            exercise in full of all outstanding Rights;

      (e)   pay when due and payable any and all Canadian federal and provincial
            transfer  taxes and  charges  (not  including  any income or capital
            taxes of the holder or  exercising  holder or any  liability  of the
            Trust to  withhold  tax)  which may be  payable  in  respect  of the
            original issuance or delivery of the Rights  Certificates,  provided
            that the Trust  shall not be  required  to pay any  transfer  tax or
            charge which may be payable in respect of any  transfer  involved in
            the transfer or delivery of Rights  Certificates  or the issuance or
            delivery of  certificates  for Trust Units or other  securities in a
            name other than that of the  registered  holder of the Rights  being
            transferred or exercised; and

      (f)   after the  Separation  Time,  except as permitted by Sections 5.1 or
            5.4 hereof,  not take (or permit any  Subsidiary to take) any action
            if at the time  such  action is taken it is  reasonably  foreseeable
            that such action will diminish  substantially or otherwise eliminate
            the benefits intended to be afforded by the Rights.

Section 2.3 Adjustments to Exercise Price; Number of Rights.

      The Exercise Price, the number and kind of Trust Units or other securities
subject  to  purchase  upon  exercise  of each  Right  and the  number of Rights
outstanding  are  subject to  adjustment  from time to time as  provided in this
Section 2.3:

      (a)   Adjustment to Exercise  Price upon changes to unit  capital.  In the
            event the Trust shall at any time after the Record Time:

<PAGE>

                                     - 22 -

            (i)   declare or pay a  distribution  on the Trust Units  payable in
                  Trust  Units  (or  other   securities   exchangeable   for  or
                  convertible  into or giving a right to acquire  Trust Units or
                  other  securities) other than the issue of Trust Units or such
                  exchangeable  or  convertible  securities  to holders of Trust
                  Units in lieu of but not in an amount which  exceeds the value
                  of regular periodic cash distributions;

            (ii)  subdivide or change the outstanding Trust Units into a greater
                  number of Trust Units;

            (iii) combine or change the  outstanding  Trust Units into a smaller
                  number of Trust Units; or

            (iv)  issue any Trust Units (or other securities exchangeable for or
                  convertible  into or giving a right to acquire  Trust Units or
                  other securities) in respect of, in lieu of or in exchange for
                  existing  Trust Units,  except as  otherwise  provided in this
                  Section 2.3;

            the Exercise Price in effect at the time of the record date for such
            distribution   or  of  the  effective  date  of  such   subdivision,
            combination  or  reclassification,  and the number and kind of Trust
            Units or other  securities,  as the  case may be,  issuable  on such
            date,  shall be  proportionately  adjusted so that the holder of any
            Right exercised  after such time shall be entitled to receive,  upon
            payment of the Exercise Price then in effect,  the aggregate  number
            and kind of Trust  Units  or other  securities,  as the case may be,
            which,  if such Right had been exercised  immediately  prior to such
            date and at a time when the Trust Unit  transfer  books of the Trust
            were open,  such holder would have owned upon such exercise and been
            entitled  to  receive by virtue of such  distribution,  subdivision,
            combination or reclassification. If, after the Record Time and prior
            to the Separation  Time, the Trust shall issue any securities  other
            than Trust Units in a transaction  of a type  described in paragraph
            (i) or (iv) above, such securities shall be treated herein as nearly
            equivalent  to Trust  Units as may be  practicable  and  appropriate
            under the circumstances, and the Trust and the Rights Agent agree to
            amend this Agreement in order to effect such treatment.  If an event
            occurs which would require an adjustment under both this Section 2.3
            and Section 3.1 hereof, the adjustment  provided for in this Section
            2.3  shall be in  addition  to,  and  shall be made  prior  to,  any
            adjustment required pursuant to Section 3.1 hereof.

      (b)   Adjustment  to  Exercise  Price upon issue of  rights,  options  and
            warrants.  In case the Trust shall at any time after the Record Time
            fix a record date for the issuance of rights, options or warrants to
            all holders of Trust Units

<PAGE>

                                     - 23 -

            entitling  them  (for  a  period  expiring  within  forty-five  (45)
            calendar  days after such record date) to subscribe  for or purchase
            Trust Units (or trust units having the same rights,  privileges  and
            preferences as Trust Units ("equivalent trust units")) or securities
            convertible into or exchangeable for or carrying a right to purchase
            Trust Units or  equivalent  trust units at a price per Trust Unit or
            per equivalent  trust unit (or having a conversion price or exchange
            price or exercise  price per security  (including the price required
            to be paid to purchase such convertible or exchangeable  security or
            right  per  Trust  Unit),   if  a  security   convertible   into  or
            exchangeable  for or  carrying a right to  purchase  Trust  Units or
            equivalent  trust units) that is less than ninety  percent  (90%) of
            the Market  Price per Trust Unit on such record  date,  the Exercise
            Price to be in effect after such record date shall be  determined by
            multiplying the Exercise Price in effect  immediately  prior to such
            record  date by a  fraction,  the  numerator  of which  shall be the
            number of Trust  Units  outstanding  on such record  date,  plus the
            number of Trust Units that the aggregate offering price of the total
            number of Trust Units and/or equivalent trust units so to be offered
            (and/or the aggregate initial conversion, exchange or exercise price
            of the  convertible  or  exchangeable  securities or rights so to be
            offered,  including  the price  required to be paid to purchase such
            convertible or  exchangeable  securities or rights so to be offered)
            would  purchase  at  such  Market  Price  per  Trust  Unit,  and the
            denominator of which shall be the number of Trust Units  outstanding
            on such  record  date,  plus the number of  additional  Trust  Units
            and/or  equivalent  trust  units to be offered for  subscription  or
            purchase (or into which the convertible or  exchangeable  securities
            are initially  convertible,  exchangeable or  exercisable).  In case
            such  subscription  price may be paid by delivery of  consideration,
            part or all of which may be in a form other than cash,  the value of
            such consideration shall be as determined in good faith by the Board
            of  Directors,   whose   determination   shall  be  described  in  a
            certificate  filed with the Rights Agent and shall be binding on the
            Rights Agent and the holders of the Rights. Such adjustment shall be
            made  successively  whenever such a record date is fixed and, in the
            event that such rights or warrants  are not so issued,  the Exercise
            Price shall be adjusted to be the Exercise Price which would then be
            in effect if such record date had not been fixed.

            For  purposes  of this  Agreement,  the  granting  of the  right  to
            purchase  Trust Units (or  equivalent  trust  units)  (whether  from
            treasury  or  otherwise)  pursuant to any  distribution  or interest
            reinvestment  plan and/or any Trust Unit purchase plan providing for
            the  reinvestment of distributions or interest payable on securities
            of the Trust and/or the  investment  of periodic  optional  payments
            and/or employee benefit, trust unit option or similar plans (so long
            as such right to purchase is in no case

<PAGE>

                                     - 24 -

            evidenced by the delivery of rights or warrants) shall not be deemed
            to constitute an issue of rights,  options or warrants by the Trust;
            provided, however, that, in the case of any distribution or interest
            reinvestment  plan, the right to purchase Trust Units (or equivalent
            trust  units) is at a price  per  security  of not less than  ninety
            percent (90%) of the current  market price per security  (determined
            as provided in such plans) of the Trust Units.

      (c)   Adjustment to Exercise Price upon certain distributions. In case the
            Trust shall at anytime after the Record Time fix a record date for a
            distribution  to all  holders  of Trust  Units  (including  any such
            distribution  made  in  connection  with  a  merger,   amalgamation,
            arrangement,  plan,  compromise or reorganization in which the Trust
            is the continuing or successor Person) of evidences of indebtedness,
            cash (other than a regular  periodic cash  distribution or a regular
            periodic cash  distribution  paid in Trust Units,  but including any
            distribution  payable in securities other than Trust Units),  assets
            or  subscription  rights,   options  or  warrants  (excluding  those
            referred to in Section  2.3(b)  above),  the Exercise Price to be in
            effect after such record date shall be determined by multiplying the
            Exercise Price in effect  immediately prior to such record date by a
            fraction, the numerator of which shall be the Market Price per Trust
            Unit on such record date,  less the fair market value (as determined
            in good faith by the Board of Directors,  whose  determination shall
            be  described  in a  statement  filed with the Rights  Agent) of the
            portion of the cash,  assets or evidences of  indebtedness  so to be
            distributed,  or of such subscription  rights,  options or warrants,
            applicable to a Trust Unit,  and the  denominator  of which shall be
            such Market  Price per Trust Unit.  Such  adjustments  shall be made
            successively  whenever such a record date is fixed, and in the event
            that such  distribution  is not so made, the Exercise Price shall be
            adjusted to be the Exercise Price which would have been in effect if
            such record date had not been fixed.

      (d)   De   minimis   threshold   for   adjustment   to   Exercise   Price.
            Notwithstanding  anything  herein to the contrary,  no adjustment in
            the Exercise Price shall be required  unless such  adjustment  would
            require an increase or decrease of at least one percent  (1%) in the
            Exercise Price;  provided,  however,  that any adjustments  which by
            reason of this  Section  2.3(d) are not required to be made shall be
            carried forward and taken into account in any subsequent adjustment.
            All calculations under this Section 2.3 shall be made to the nearest
            cent  or to the  nearest  one-hundredth  of a Trust  Unit  or  other
            security, as the case may be.  Notwithstanding the first sentence of
            this Section  2.3(d),  any  adjustment  required by this Section 2.3
            shall be made no later than the earlier of (i)

<PAGE>

                                     - 25 -

            three (3) years from the date of the transaction which mandates such
            adjustment and (ii) the Expiration Time.

      (e)   Trust may provide for alternate means of adjustment.  Subject to the
            prior  consent of the holders of Trust  Units or Rights  obtained as
            set forth in Section 5.4(2) or Section 5.4(3) hereof, as applicable,
            in the event the Trust shall at any time after the Record Time issue
            any  securities  (other than Trust Units),  or rights or warrants to
            subscribe  for  or  purchase  any  such  securities,  or  securities
            convertible  into or  exchangeable  for any  such  securities,  in a
            transaction  referred to in Sections  2.3(a)(i) or (iv) or 2.3(b) or
            (c) above, if the Board of Directors acting in good faith determines
            that the adjustments  contemplated by Sections  2.3(a),  (b) and (c)
            above in connection  with such  transaction  will not  appropriately
            protect the  interests of the holders of Rights,  the Trust shall be
            entitled to determine what other  adjustments to the Exercise Price,
            number of Rights  and/or  securities  purchasable  upon  exercise of
            Rights would be appropriate  and,  notwithstanding  Sections 2.3(a),
            (b) and (c) above,  such  adjustments,  rather than the  adjustments
            contemplated by Sections 2.3(a),  (b) and (c) above,  shall be made.
            The Trust  and the  Rights  Agent  shall  amend  this  Agreement  as
            appropriate to provide for such adjustments.

      (f)   Adjustment to Rights  exercisable  into securities  other than Trust
            Units.  If as a result of an adjustment made pursuant to Section 3.1
            hereof,  the holder of any Right  thereafter  exercised shall become
            entitled  to  receive  any   securities   other  than  Trust  Units,
            thereafter  the number of such other  securities so receivable  upon
            exercise  of any  Right  and the  Exercise  Price  thereof  shall be
            subject to adjustment  from time to time in a manner and on terms as
            nearly  equivalent as practicable to the provisions  with respect to
            the Trust Units contained in this Section 2.3, and the provisions of
            this  Agreement  with respect to the Trust Units shall apply on like
            terms to any such other securities.

      (g)   Rights  to  evidence  right to  purchase  Trust  Units  at  adjusted
            Exercise Price. Each Right originally issued by the Trust subsequent
            to  any  adjustment  made  to the  Exercise  Price  hereunder  shall
            evidence the right to purchase,  at the adjusted Exercise Price, the
            number of Trust Units  purchasable  from time to time hereunder upon
            exercise  of such  Right,  all  subject  to  further  adjustment  as
            provided herein.

      (h)   Adjustment to number of Trust Units  purchasable  upon adjustment to
            Exercise  Price.  Unless the Trust shall have exercised its election
            as provided in Section  2.3(i)  below,  upon each  adjustment of the
            Exercise  Price as a result  of the  calculations  made in  Sections
            2.3(b) and (c) above,  each Right  outstanding  immediately prior to
            the making of such

<PAGE>

                                     - 26 -

            adjustment shall thereafter  evidence the right to purchase,  at the
            adjusted  Exercise Price,  that number of Trust Units (calculated to
            the nearest one  ten-thousandth)  obtained by multiplying the number
            of securities purchasable upon exercise of a Right immediately prior
            to this  adjustment  by a fraction,  the numerator of which shall be
            the Exercise Price in effect immediately prior to such adjustment of
            the  Exercise  Price,  and the  denominator  of  which  shall be the
            Exercise Price in effect  immediately  after such  adjustment of the
            Exercise Price.

      (i)   Election  to adjust  number of Rights  upon  adjustment  to Exercise
            Price.  The Trust shall be entitled to elect on or after the date of
            any adjustment of the Exercise Price to adjust the number of Rights,
            in lieu of any  adjustment in the number of Trust Units  purchasable
            upon the exercise of a Right.  Each of the Rights  outstanding after
            the adjustment in the number of Rights shall be exercisable  for the
            number of Trust Units for which a Right was exercisable  immediately
            prior to such  adjustment.  Each Right held of record  prior to such
            adjustment  of the  number of Rights  shall  become  that  number of
            Rights  (calculated to the nearest one  ten-thousandth)  obtained by
            dividing  the  Exercise  Price  in  effect   immediately   prior  to
            adjustment  of the Exercise  Price by the  Exercise  Price in effect
            immediately  after adjustment of the Exercise Price. The Trust shall
            make a public  announcement  of its election to adjust the number of
            Rights,  indicating the record date for the adjustment and, if known
            at the time,  the amount of the  adjustment to be made.  This record
            date may be the date on which the Exercise  Price is adjusted or any
            day thereafter but, if Rights  Certificates have been issued,  shall
            be at  least  ten  (10)  days  later  than  the  date of the  public
            announcement.  If Rights  Certificates  have been issued,  upon each
            adjustment, of the number of Rights pursuant to this Section 2.3(i),
            the Trust shall, as promptly as practicable, cause to be distributed
            to  holders of record of Rights  Certificates  on such  record  date
            Rights Certificates  evidencing,  subject to Section 5.5 hereof, the
            additional  Rights to which  such  holders  shall be  entitled  as a
            result of such  adjustment,  or, at the option of the  Trust,  shall
            cause to be  distributed  to such holders of record in  substitution
            and  replacement  for the Rights  Certificates  held by such holders
            prior to the date of  adjustment,  and upon surrender  thereof,  new
            Rights Certificates  evidencing all the Rights to which such holders
            shall be entitled after such adjustment.  Rights  Certificates so to
            be distributed  shall be issued,  executed and  countersigned in the
            manner provided for herein and may bear, at the option of the Trust,
            the adjusted  Exercise Price and shall be registered in the names of
            the holders of record of Rights  Certificates on the record date for
            the adjustment specified in the public announcement.

<PAGE>

                                     - 27 -

      (j)   Rights  Certificates may contain  Exercise Price before  adjustment.
            Irrespective  of any  adjustment or change in the Exercise  Price or
            the number of Trust Units  issuable upon the exercise of the Rights,
            the  Rights  Certificates  theretofore  and  thereafter  issued  may
            continue to express the  Exercise  Price per security and the number
            of   securities   which  were   expressed  in  the  initial   Rights
            Certificates issued hereunder.

      (k)   Trust may in certain cases defer issues of  securities.  In any case
            in which this Section 2.3 shall  require that an  adjustment  in the
            Exercise Price be made effective as of a record date for a specified
            event,  the Trust may elect to defer  until the  occurrence  of such
            event the issuance to the holder of any Right  exercised  after such
            record  date the number of Trust Units and other  securities  of the
            Trust, if any, issuable upon such exercise over and above the number
            of Trust Units and other  securities of the Trust, if any,  issuable
            upon  such  exercise  on the basis of the  Exercise  Price in effect
            prior to such adjustment;  provided,  however,  that the Trust shall
            deliver to such holder an  appropriate  instrument  evidencing  such
            holder's right to receive such additional securities  (fractional or
            otherwise) or securities  upon the occurrence of the event requiring
            such adjustment.

      (l)   Trust has  discretion  to  reduce  Exercise  Price for tax  reasons.
            Notwithstanding  anything in this Section 2.3 to the  contrary,  the
            Trust  shall be  entitled to make such  reductions  in the  Exercise
            Price, in addition to those adjustments  expressly  required by this
            Section 2.3, as and to the extent that in their good faith judgment,
            the Board of Directors shall determine to be advisable in order that
            any (i)  consolidation  or  subdivision  of the  Trust  Units,  (ii)
            issuance  of any Trust  Units at less than the Market  Price,  (iii)
            issuance of securities  convertible  into or exchangeable  for Trust
            Units, (iv) stock distributions,  or (v) issuance of rights, options
            or warrants,  referred to in this Section 2.3 hereafter  made by the
            Trust to  holders of its Trust  Units,  shall not be taxable to such
            unitholders.

Section 2.4 Date on Which Exercise is Effective.

      Each person in whose name any  certificate  for Trust Units is issued upon
the  exercise  of Rights  shall for all  purposes  be deemed to have  become the
holder of record of the Trust Units represented thereby on, and such certificate
shall be dated,  the date upon  which the  Rights  Certificate  evidencing  such
Rights  was  duly  surrendered  (together  with a  duly  completed  Election  to
Exercise) and payment of the Exercise  Price for such Rights (and any applicable
transfer taxes and other  governmental  charges payable by the exercising holder
hereunder) was made; provided,  however,  that if the date of such surrender and
payment  is a date upon  which the Trust  Unit  transfer  books of the Trust are
closed, such person shall be deemed to have become the record holder

<PAGE>

                                     - 28 -

of such Trust Units on, and such certificate shall be dated, the next succeeding
Business Day on which the Trust Unit transfer books of the Trust are open.

Section 2.5 Execution, Authentication, Delivery and Dating of Rights
            Certificates

(1)   The Rights  Certificates  shall be  executed on behalf of the Trust by the
      President  or any senior  officer of the  Corporation,  together  with the
      Secretary of the  Corporation.  The signature of any of these  officers on
      the Rights  Certificates may be manual or facsimile.  Rights  Certificates
      bearing the manual or facsimile  signatures of individuals who were at any
      time the persons so authorized by or on behalf of the Trust shall bind the
      Trust, notwithstanding that such individuals or any of them have ceased to
      hold such  offices  prior to the  countersignature  and  delivery  of such
      Rights Certificates.

(2)   Promptly  after the Trust learns of the  Separation  Time,  the Trust will
      notify the Rights Agent of such  Separation  Time and will deliver  Rights
      Certificates   executed   by  the   Trust   to  the   Rights   Agent   for
      countersignature,  and the Rights  Agent shall  manually  or by  facsimile
      signature  countersign and send such Rights Certificates to the holders of
      the Rights pursuant to Section 2.2(3) hereof. No Rights  Certificate shall
      be valid  for any  purpose  until  countersigned  by the  Rights  Agent as
      aforesaid.

(3)   Each  Rights  Certificate  shall  be dated  the  date of  countersignature
      thereof.

Section 2.6 Registration, Registration of Transfer and Exchange.

(1)   The Trust will  cause to be kept a register  (the  "Rights  Register")  in
      which,  subject to such  reasonable  regulations as it may prescribe,  the
      Trust will provide for the registration and transfer of Rights. The Rights
      Agent  is  hereby  appointed   "Rights   Registrar"  for  the  purpose  of
      maintaining,  or causing to be  maintained,  the Rights  Register  for the
      Trust and registering  Rights and transfers of Rights as herein  provided.
      In the event that the Rights Agent shall cease to be the Rights Registrar,
      the Rights Agent will have the right to examine the Rights Register at all
      reasonable times.

(2)   After the Separation Time and prior to the Expiration Time, upon surrender
      for  registration  of transfer or exchange of any Rights  Certificate  and
      subject to the provisions of Section 2.6(4) below and the other provisions
      of this Agreement,  the  individuals  designated by the Board of Directors
      will execute on behalf of the Trust and the Rights Agent will countersign,
      register  and  deliver,  in the  name  of  the  holder  or the  designated
      transferee   or   transferees   as  required   pursuant  to  the  holder's
      instructions,  one or more new  Rights  Certificates  evidencing  the same
      aggregate number of Rights as did the Rights Certificates so surrendered.

<PAGE>

                                     - 29 -

(3)   All Rights issued upon any  registration of transfer or exchange of Rights
      Certificates  shall be the valid obligations of the Trust, and such Rights
      shall be entitled to the same benefits  under this Agreement as the Rights
      surrendered upon such registration of transfer or exchange.

(4)   Every  Rights  Certificate  surrendered  for  registration  of transfer or
      exchange shall be duly endorsed, or be accompanied by a written instrument
      of transfer in form  satisfactory to the Trust or the Rights Agent, as the
      case may be,  duly  executed  by the  registered  holder  thereof  or such
      holder's  attorney  duly  authorized  in writing.  As a  condition  to the
      issuance of any new Rights  Certificate  under this Section 2.6, the Trust
      or the Rights Agent may require the payment of a sum  sufficient  to cover
      any tax or other  governmental  charge  that may be  imposed  in  relation
      thereto and the Trust may require payment of a sum sufficient to cover any
      other  expenses  (including  the fees and expenses of the Rights Agent) in
      connection therewith.

Section 2.7 Mutilated, Destroyed, Lost and Stolen Right Certificates.

(1)   If any mutilated  Rights  Certificate  is  surrendered to the Rights Agent
      prior to the Expiration Time, the Trust shall execute and the Rights Agent
      shall manually  countersign and deliver in exchange  therefor a new Rights
      Certificate  evidencing  the  same  number  of  Rights  as did the  Rights
      Certificate so surrendered.

(2)   If there shall be delivered to the Trust and the Rights Agent prior to the
      Expiration  Time (i)  evidence  to their  reasonable  satisfaction  of the
      destruction,  loss or  theft of any  Rights  Certificate,  and  (ii)  such
      indemnity  or other  security  as may be  required by them to save each of
      them and any of their agents  harmless,  then, in the absence of notice to
      the Trust or the  Rights  Agent  that  such  Rights  Certificate  has been
      acquired by a bona fide purchaser, the individuals designated by the Board
      of Directors shall execute on behalf of the Trust and, upon the request of
      the Board of Directors, the Rights Agent shall countersign and deliver, in
      lieu of any such  destroyed,  lost or  stolen  Rights  Certificate,  a new
      Rights Certificate  evidencing the same number of Rights as did the Rights
      Certificate so destroyed, lost or stolen.

(3)   As a condition  to the issuance of any new Rights  Certificate  under this
      Section  2.7,  the Trust or the Rights  Agent may require the payment of a
      sum sufficient to cover any tax or other  governmental  charge that may be
      imposed in relation  thereto  and the Trust may  require  payment of a sum
      sufficient to cover any other expenses (including the fees and expenses of
      the Rights Agent) in connection therewith.

<PAGE>

                                     - 30 -

(4)   Every new Rights  Certificate  issued pursuant to this Section 2.7 in lieu
      of any  destroyed,  lost or stolen Rights  Certificate  shall  evidence an
      original additional  contractual  obligation of the Trust,  whether or not
      the  destroyed,  lost or stolen  Rights  Certificate  shall be at any time
      enforceable by anyone, and the holder thereof shall be entitled to all the
      benefits of this Agreement  equally and  proportionately  with any and all
      other holders of Rights duly issued by the Trust.

Section 2.8 Persons Deemed Owners.

      Prior  to due  presentment  of a  Rights  Certificate  (or,  prior  to the
Separation  Time, the associated  Trust Unit  certificate)  for  registration of
transfer,  the Trust,  the Rights Agent and any agent of the Trust or the Rights
Agent  shall be  entitled  to deem and treat the  person in whose  name a Rights
Certificate  (or,  prior to the  Separation  Time,  the  associated  Trust  Unit
certificate)  is  registered  as the  absolute  owner  thereof and of the Rights
evidenced thereby for all purposes whatsoever. As used in this Agreement, unless
the context otherwise  requires,  the term "holder" of any Rights shall mean the
registered  holder  of such  Rights  (or,  prior  to the  Separation  Time,  the
associated Trust Units).

Section 2.9 Delivery and Cancellation of Rights Certificates.

      All Rights  Certificates  surrendered  upon  exercise  or for  redemption,
registration  of transfer or exchange  shall, if surrendered to any person other
than the Rights Agent, be delivered to the Rights Agent and, in any case,  shall
be promptly  cancelled by the Rights Agent. The Trust may at any time deliver to
the  Rights  Agent  for   cancellation   any  Rights   Certificates   previously
countersigned  and delivered  hereunder which the Trust may have acquired in any
manner  whatsoever,  and all Rights  Certificates so delivered shall be promptly
cancelled by the Rights Agent. No Rights  Certificate  shall be countersigned in
lieu of or in exchange for any Rights Certificates cancelled as provided in this
Section 2.9, except as expressly  permitted by this Agreement.  The Rights Agent
shall, subject to applicable laws, destroy all cancelled Rights Certificates and
deliver a certificate of destruction to the Trust.

Section 2.10 Agreement of Rights Holders.

      Every holder of Rights,  by accepting  the same,  consents and agrees with
the Trust and the Rights Agent and with every other holder of Rights:

      (a)   to be bound by and subject to the provisions of this  Agreement,  as
            amended or  supplemented  from time to time in  accordance  with the
            terms hereof, in respect of all Rights held;

      (b)   that,  prior to the Separation Time, each Right will be transferable
            only together  with,  and will be  transferred by a transfer of, the
            Trust Unit associated therewith;

<PAGE>

                                     - 31 -

      (c)   that,  after the Separation  Time, the Rights  Certificates  will be
            transferable only on the Rights Register as provided herein;

      (d)   that, prior to due presentment of a Rights Certificate (or, prior to
            the  Separation  Time, the associated  Trust Unit  certificate)  for
            registration of transfer,  the Trust, the Rights Agent and any agent
            of the Trust or the Rights Agent shall be entitled to deem and treat
            the Person in whose name the Rights  Certificate  (or,  prior to the
            Separation   Time,  the  associated   Trust  Unit   certificate)  is
            registered as the absolute owner thereof and of the Rights evidenced
            thereby  (notwithstanding  any  notations of ownership or writing on
            such Rights  Certificate  or the associated  Trust Unit  certificate
            made by anyone  other  than the Trust or the  Rights  Agent) for all
            purposes  whatsoever,  and  neither  the Trust nor the Rights  Agent
            shall be affected by any notice to the contrary;

      (e)   that such  holder of Rights  has  waived  his right to  receive  any
            fractional  Rights or any  fractional  Trust Units upon  exercise of
            Right;

      (f)   that, without the approval of any holder of Rights and upon the sole
            authority  of the  Board of  Directors  acting in good  faith,  this
            Agreement may be  supplemented or amended from time to time pursuant
            to and as provided herein; and

      (g)   notwithstanding anything in this Agreement to the contrary,  neither
            the Trust nor the  Rights  Agent  shall  have any  liability  to any
            holder of a Right or any other  Person as a result of its  inability
            to perform any of its obligations  under this Agreement by reason of
            any  preliminary or permanent  injunction or other order,  decree or
            ruling  issued  by  a  court  of  competent  jurisdiction  or  by  a
            governmental,  regulatory or administrative agency or commission, or
            any statue,  rule,  regulation  or executive  order  promulgated  or
            enacted by any  governmental  authority,  prohibiting  or  otherwise
            restraining performance of such obligation.

Section 2.11 Rights Certificate Holder not Deemed a Unitholder.

      No holder, as such, of any Rights or Rights  Certificate shall be entitled
to vote,  receive  distributions  or be deemed for any  purpose  whatsoever  the
holder of any Trust  Unit or any other  security  of the Trust  which may at any
time be issuable on the exercise of the Rights  represented  thereby,  nor shall
anything contained herein or in any Rights Certificate be construed or deemed to
confer upon the holder of any Right or Rights  Certificate,  as such, any of the
rights,  titles,  benefits or privileges of a holder of Trust Units or any other
securities  of the Trust or any right to vote at any meeting of holders of Trust
Units  upon any  matter  submitted  to  holders  of Trust  Units at any  meeting
thereof,  or to give or  withhold  consent  to any  action of the  Trust,  or to
receive  notice of any  meeting or other  action  affecting  any holder of Trust
Units or any other

<PAGE>

                                     - 32 -

securities  of the Trust  except as  expressly  provided  herein,  or to receive
distributions or subscription  rights,  or otherwise,  until the Right or Rights
evidenced by Rights  Certificates  shall have been duly  exercised in accordance
with the terms and provisions hereof.

                                    ARTICLE 3
                ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN
                                  TRANSACTIONS

Section 3.1 Flip-in Event.

(1)   Subject to Section 3.1(2) below,  and Section  5.1(2),  Section 5.1(3) and
      Section  5.1(4) hereof,  in the event that prior to the Expiration  Time a
      Flip-in  Event  shall  occur,  the Trust  shall take such action as may be
      necessary to ensure and provide  within  eight (8)  Business  Days of such
      occurrence,  or such  longer  period as may be  required  to  satisfy  all
      applicable requirements of the Securities Act (Alberta) and the securities
      legislation  of each other  province of Canada,  that,  except as provided
      below,  each Right shall thereafter  constitute the right to purchase from
      the Trust upon exercise  thereof in accordance  with the terms hereof that
      number of Trust Units of the Trust having an aggregate Market Price on the
      date of the  occurrence  of such Flip-in Event equal to twice the Exercise
      Price for an amount in cash equal to the Exercise  Price (such Right to be
      appropriately  adjusted in a manner analogous to the applicable adjustment
      provided  for in  Section  2.3 hereof in the event that after such date of
      occurrence an event of a type analogous to any of the events  described in
      Section 2.3 hereof shall have occurred with respect to such Trust Units).

(2)   Notwithstanding  anything  in this  Agreement  to the  contrary,  upon the
      occurrence of any Flip-in Event,  any Rights that are  Beneficially  Owned
      by:

      (a)   an  Acquiring  Person,  any  Affiliate  or Associate of an Acquiring
            Person,  any Person  acting  jointly or in concert with an Acquiring
            Person or any Affiliate or Associate of such  Acquiring  Person,  or
            any  Affiliate or  Associate of such Person so acting  jointly or in
            concert; or

      (b)   a  transferee  or other  successor  in title of Rights,  directly or
            indirectly, of an Acquiring Person (or of any Affiliate or Associate
            of an  Acquiring  Person)  or of any  Person  acting  jointly  or in
            concert with an Acquiring Person or any Associate or Affiliate of an
            Acquiring  Person who becomes a  transferee  or  successor  in title
            concurrently  with or subsequent to the  Acquiring  Person  becoming
            such;

      shall become null and void without any further  action,  and any holder of
      such Rights (including  transferees or successors in title) shall not have
      any rights

<PAGE>

                                     - 33 -

      whatsoever to exercise  such Rights under any provision of this  Agreement
      and shall not have thereafter any other rights  whatsoever with respect to
      such Rights, whether under any provision of this Agreement or otherwise.

                                    ARTICLE 4
                                THE RIGHTS AGENT

Section 4.1 General.

(1)   The Trust  hereby  appoints the Rights Agent to act as agent for the Trust
      in accordance with the terms and conditions  hereof,  and the Rights Agent
      hereby accepts such  appointment.  The Trust may from time to time appoint
      such co-Rights  Agents as it may deem  necessary or desirable,  subject to
      the prior  approval of the Rights Agent.  In the event the Trust  appoints
      one or more co-Rights  Agents,  the respective duties of the Rights Agents
      and  co-Rights  Agents  shall  be as the  Trust  may  determine,  with the
      approval of the Rights Agent.  The Trust agrees to pay to the Rights Agent
      reasonable  compensation  for all services  rendered by it hereunder  and,
      from time to time, on demand of the Rights Agent, its reasonable  expenses
      and other  disbursements  incurred in the  administration and execution of
      this Agreement and the exercise and  performance of its duties  hereunder.
      The Trust  also  agrees to  indemnify  the  Rights  Agent,  its  officers,
      directors and employees  for, and to hold such persons  harmless  against,
      any  loss,  liability,  or  expense  incurred  (that is not the  result of
      negligence,  bad faith or wilful  misconduct on the part of any one or all
      of the Rights Agent,  its officers,  directors or employees)  for anything
      done or omitted by the Rights Agent in connection  with the acceptance and
      administration  of this  Agreement,  including  the costs and  expenses of
      defending against any claim of liability,  which right to  indemnification
      will  survive the  termination  of this  Agreement or the  resignation  or
      removal of the Rights Agent.

(2)   The Rights Agent shall be protected  from and shall incur no liability for
      or in respect of any action taken, suffered or omitted by it in connection
      with its administration of this Agreement in reliance upon any certificate
      for  Trust  Units or any  Rights  Certificate  or  certificate  for  other
      securities of the Trust,  instrument  of assignment or transfer,  power of
      attorney,  endorsement,  affidavit,  letter, notice,  direction,  consent,
      certificate,  statement,  or other paper or document  believed by it to be
      genuine  and to be signed,  executed  and,  where  necessary,  verified or
      acknowledged, by the proper Person or Persons.

(3)   The Trust shall inform the Rights Agent in a reasonably  timely  manner of
      events which may materially affect the administration of this Agreement by
      the  Rights  Agent and at any time,  upon  request,  shall  provide to the
      Rights  Agent  an  incumbency  certificate  certifying  the  then  current
      officers  of the  Corporation  who have  been  authorized  to sign  Rights
      Certificates on behalf of the Trust.

<PAGE>

                                     - 34 -

Section 4.2 Merger or Amalgamation or Change of Name of Rights Agent.

(1)   Any corporation  into which the Rights Agent or any successor Rights Agent
      may be merged or amalgamated or with which it may be consolidated,  or any
      corporation resulting from any merger, amalgamation, statutory arrangement
      or  consolidation  to which the Rights Agent or any successor Rights Agent
      is  a  party,  or  any  corporation   succeeding  to  the  shareholder  or
      stockholder  services business of the Rights Agent or any successor Rights
      Agent,  will be the  successor  to the Rights  Agent under this  Agreement
      without  the  execution  or filing of any paper or any  further act on the
      part of any of the parties hereto, provided that such corporation would be
      eligible for appointment as a successor  Rights Agent under the provisions
      of Section 4.4 hereof.  In case at the time such  successor  Rights  Agent
      succeeds  to the  agency  created  by  this  Agreement  any of the  Rights
      Certificates have been countersigned but not delivered, any such successor
      Rights  Agent may adopt the  countersignature  of the  predecessor  Rights
      Agent and deliver such Rights  Certificates so countersigned;  and in case
      at that time any of the Rights  Certificates have not been  countersigned,
      any successor Rights Agent may countersign such Rights Certificates either
      in the  name  of the  predecessor  Rights  Agent  or in  the  name  of the
      successor  Rights  Agent;  and in all such cases such Rights  Certificates
      will have the full force provided in the Rights  Certificates  and in this
      Agreement.

(2)   In case at any time the name of the Rights  Agent is  changed  and at such
      time any of the Rights  Certificates shall have been countersigned but not
      delivered, the Rights Agent may adopt the countersignature under its prior
      name and deliver Rights Certificates so countersigned; and in case at that
      time any of the Rights Certificates shall not have been countersigned, the
      Rights Agent may countersign such Rights  Certificates either in its prior
      name  or  in  its  changed  name;  and  in  all  such  cases  such  Rights
      Certificates shall have the full force provided in the Rights Certificates
      and in this Agreement.

Section 4.3 Duties of Rights Agent.

      The Rights Agent  undertakes  the duties and  obligations  imposed by this
Agreement upon the following terms and conditions, to all of which the Trust and
the holders of Rights Certificates, by their acceptance thereof, shall be bound:

(1)   The Rights  Agent may retain and consult  with legal  counsel  (who may be
      legal  counsel for the Trust) and the opinion of such counsel will be full
      and complete  authorization  and  protection to the Rights Agent as to any
      action taken or omitted to be taken by it in good faith and in  accordance
      with such  opinion.  Subject  to the prior  written  consent of the Trust,
      which consent  shall not be  unreasonably  withheld,  the Rights Agent may
      also  consult with such other  experts as the Rights Agent shall  consider
      necessary or appropriate to properly carry out the duties and  obligations
      imposed under this Agreement (at the

<PAGE>

                                     - 35 -

      expense of the Trust) and the Rights  Agent  shall be  entitled to act and
      rely in good faith on the advice of any such expert.

(2)   Whenever in the  performance of its duties under this Agreement the Rights
      Agent deems it necessary or desirable that any fact or matter be proved or
      established  by  the  Trust  prior  to  taking  or  suffering  any  action
      hereunder,  such fact or matter (unless other evidence in respect  thereof
      be herein specifically prescribed) may be deemed to be conclusively proven
      and established by a certificate signed by a person believed by the Rights
      Agent  to  be  the   Chairman  of  the  Board,   the   President   or  any
      Vice-President,  the  Treasurer or the  Secretary of the  Corporation  and
      delivered  to  the  Rights  Agent;  and  such  certificate  will  be  full
      authorization to the Rights Agent for any action taken or suffered in good
      faith by it under the  provisions of this  Agreement in reliance upon such
      certificate.

(3)   The Rights  Agent will be liable  hereunder  only for events which are the
      result of its own negligence,  bad faith or wilful  misconduct and that of
      its officers, directors and employees.

(4)   The  Rights  Agent  will  not be  liable  for or by  reason  of any of the
      statements  of fact or  recitals  contained  in this  Agreement  or in the
      certificates  for  Trust  Units or the  Rights  Certificates  (except  its
      countersignature  thereof) or be required to verify the same, but all such
      statements  and  recitals  are and will be deemed to have been made by the
      Trust only.

(5)   The Rights  Agent will not be under any  responsibility  in respect of the
      validity of this  Agreement or the execution and delivery  hereof  (except
      the due authorization,  execution and delivery hereof by the Rights Agent)
      or in respect of the validity or  execution of any Trust Unit  certificate
      or Rights Certificate (except its countersignature  thereof);  nor will it
      be  responsible  for any breach by the Trust of any  covenant or condition
      contained in this Agreement or in any Rights  Certificate;  nor will it be
      responsible for any change in the  exercisability of the Rights (including
      the  Rights  becoming  void  pursuant  to  Section  3.1(2)  hereof) or any
      adjustment  required  under  the  provisions  of  Section  2.3  hereof  or
      responsible for the manner, method or amount of any such adjustment or the
      ascertaining  of the  existence  of  facts  that  would  require  any such
      adjustment (except with respect to the exercise of Rights after receipt of
      the  certificate  contemplated  by Section 2.3 hereof  describing any such
      adjustment);  nor  will it by any act  hereunder  be  deemed  to make  any
      representation  or warranty as to the  authorization of any Trust Units to
      be issued  pursuant to this  Agreement  or any Rights or as to whether any
      Trust Units will, when issued, be duly and validly  authorized,  executed,
      issued and delivered or fully paid and non-assessable.

<PAGE>

                                     - 36 -

(6)   The Trust agrees that it will perform, execute, acknowledge and deliver or
      cause to be  performed,  executed,  acknowledged,  and  delivered all such
      further and other acts,  instruments  and  assurances as may reasonably be
      required by the Rights  Agent for the carrying  out or  performing  by the
      Rights Agent of the provisions of this Agreement.

(7)   The Rights Agent is hereby authorized and directed to accept  instructions
      with respect to the  performance  of its duties  hereunder from any person
      believed by the Rights Agent to be the  Chairman of the Board,  President,
      any Vice-President,  Treasurer or any Assistant Treasurer or the Secretary
      of the Corporation and to apply to such persons for advice or instructions
      in connection  with its duties,  and it shall not be liable for any action
      taken or suffered by it in good faith in accordance  with  instructions of
      any such person.

(8)   The Rights Agent and any shareholder or stockholder,  director, officer or
      employee of the Rights Agent may buy, sell or deal in Trust Units,  Rights
      or other securities of the Trust or become  pecuniarily  interested in any
      transaction  in which the Trust may be interested or contract with or lend
      money to the Trust or otherwise  act as fully and freely as though it were
      not Rights Agent under this  Agreement.  Nothing herein shall preclude the
      Rights  Agent from acting in any other  capacity  for the Trust or for any
      other legal entity.

Section 4.4 Change of Rights Agent.

(1)   The Rights Agent may resign and be  discharged  from its duties under this
      Agreement  upon  sixty  (60) days'  notice  (or such  lesser  notice as is
      acceptable  to the  Trust)  in  writing  mailed  to the  Trust and to each
      transfer agent of Trust Units by registered or certified  mail, and to the
      holders of the Rights in accordance with Section 5.8 hereof.

(2)   The Trust may remove the Rights  Agent upon  thirty  (30) days'  notice in
      writing,  mailed to the  Rights  Agent and to each  transfer  agent of the
      Trust  Units by  registered  or  certified  mail and to the holders of the
      Rights in accordance with Section 5.8 hereof.

(3)   If the  Rights  Agent  should  resign or be removed  or  otherwise  become
      incapable  of acting,  the Trust will  appoint a  successor  to the Rights
      Agent.  If the  Trust  fails to make such  appointment  within a period of
      sixty  (60) days  after  such  removal  or after it has been  notified  in
      writing  of  such   resignation   or   incapacity   by  the  resigning  or
      incapacitated  Rights Agent or by the holder of any Rights  (which  holder
      shall,  with such notice,  submit such  holder's  Rights  Certificate  for
      inspection  by the  Trust),  then the  Rights  Agent or the  holder of any
      Rights  may  apply  to  any  court  of  competent   jurisdiction  for  the
      appointment of a new Rights Agent at the Trust's expense.

<PAGE>

                                     - 37 -

(4)   Any successor  Rights Agent,  whether  appointed by the Trust or by such a
      court,  shall be a corporation  incorporated under the laws of Canada or a
      province thereof authorized to carry on the business of a trust company in
      Canada.

(5)   After appointment, the successor Rights Agent will be vested with the same
      powers,  rights,  duties and responsibilities as if it had been originally
      named as Rights Agent  without  further act or deed;  but the  predecessor
      Rights Agent, upon receiving from the Trust payment in full of all amounts
      outstanding  under this  Agreement,  shall  deliver  and  transfer  to the
      successor Rights Agent any property at the time held by it hereunder,  and
      execute  and  deliver  any  further  assurance,  conveyance,  act or  deed
      necessary for the purpose.

(6)   Not later than the effective date of any such appointment,  the Trust will
      file notice thereof in writing with the predecessor  Rights Agent and each
      transfer agent of the Trust Units, and mail a notice thereof in writing to
      the holders of the Rights.

(7)   The cost of giving any notice  required  under this  Section  4.4 shall be
      borne solely by the Trust. Failure to give any notice provided for in this
      Section 4.4 however, or any defect therein,  shall not affect the legality
      or  validity  of the  resignation  or removal  of the Rights  Agent or the
      appointment of the successor Rights Agent, as the case may be.

                                    ARTICLE 5
                                  MISCELLANEOUS

Section 5.1 Redemption and Waiver.

(1)   Subject  to the prior  consent  of the  holders  of Trust  Units or Rights
      obtained  as set forth in Section  5.4(2) or  Section  5.4(3)  hereof,  as
      applicable,  the Board of Directors  acting in good faith may, at any time
      prior to the  occurrence of a Flip-in  Event,  elect to redeem all but not
      less  than all of the then  outstanding  Rights at a  redemption  price of
      $0.00001  per Right  appropriately  adjusted in a manner  analogous to the
      applicable adjustment provided for in Section 2.3 hereof in the event that
      an event of the type  described in Section 2.3 hereof shall have  occurred
      (such  redemption  price  being  herein  referred  to as  the  "Redemption
      Price").

(2)   Subject to the prior consent of the holders of Trust Units obtained as set
      forth in Section  5.4(2)  hereof,  the Board of Directors may, at any time
      prior to the occurrence of a Flip-in Event as to which the  application of
      Section 3.1 hereof has not been waived  pursuant to this  Section  5.1, if
      such Flip-in Event would occur by reason of an  acquisition of Trust Units
      otherwise  than  pursuant to a Take-over  Bid made by means of a Take-over
      Bid circular to all holders of record of Trust Units and otherwise than in
      the circumstances set forth in Section 5.1(4) hereof,

<PAGE>

                                     - 38 -

      waive the application of Section 3.1 hereof to such Flip-in Event. In such
      event,  the Board of Directors  shall extend the Separation Time to a date
      at least ten (10)  Business  Days  subsequent to the meeting of holders of
      Trust Units called to approve such waiver.

(3)   The Board of Directors  acting in good faith may,  prior to the occurrence
      of a Flip-in Event,  and upon prior written notice delivered to the Rights
      Agent,  determine  to waive the  application  of  Section  3.1 hereof to a
      Flip-in Event that may occur by reason of a Take-over Bid made by means of
      a take-over  bid  circular to all holders of record of Trust Units  (which
      for greater  certainty  shall not include the  circumstances  described in
      Section 5.1(9) below);  provided that if the Board of Directors waives the
      application  of Section 3.1 hereof to a particular  Flip-in Event pursuant
      to this Section  5.1(3),  the Board of  Directors  shall be deemed to have
      waived the  application  of Section 3.1 hereof to any other  Flip-in Event
      occurring by reason of any  Take-over Bid made by means of a take-over bid
      circular  to all  holders of record of Trust  Units prior to the expiry of
      any  Take-over  Bid in  respect of which a waiver is, or is deemed to have
      been, granted pursuant to this Section 5.1(3).

(4)   The Board of  Directors  may,  prior to the close of business on the tenth
      (10th) day  following the Trust Unit  Acquisition  Date,  determine,  upon
      prior written notice  delivered to the Rights Agent,  to waive or to agree
      to waive the  application  of  Section  3.1  hereof  to a  Flip-in  Event,
      provided that both of the following conditions are satisfied:

      (a)   the  Board of  Directors  has  determined  that a Person  became  an
            Acquiring  Person by  inadvertence  and  without  any  intention  to
            become,  or knowledge that Person would become, an Acquiring Person;
            and

      (b)   such Acquiring Person has reduced its Beneficial  Ownership of Trust
            Units (or has entered into a contractual arrangement with the Trust,
            acceptable  to the Board of  Directors,  to do so within thirty (30)
            days of the date on which such  contractual  arrangement  is entered
            into) such that at the time the waiver becomes effective pursuant to
            this Section 5.1(4) it is no longer an Acquiring Person;

      and in the event of such a waiver, for the purposes of this Agreement, the
      Flip-in Event shall be deemed never to have occurred.

(5)   Where a Person  acquires,  pursuant to a Permitted Bid, a Competing Bid or
      an Exempt Acquisition under Section 5.1(3) above, outstanding Trust Units,
      other than Trust  Units  Beneficially  Owned by such Person at the date of
      such Permitted Bid,  Competing Bid or Exempt  Acquisition,  then the Trust
      shall

<PAGE>

                                     - 39 -

      immediately upon the consummation of such acquisition redeem the Rights at
      the Redemption Price.

(6)   If the Trust is obligated under Section 5.1(5) above to redeem the Rights,
      or if the Board of Directors  elects under Section 5.1(1) above or Section
      5.1(8)  below to redeem the Rights,  the right to exercise the Rights will
      thereupon,  without further action and without notice,  terminate and each
      Right will after redemption be null and void and the only right thereafter
      of the holders of Rights shall be to receive the Redemption Price.

(7)   Within ten (10) days after the Trust is  obligated  under  Section  5.1(5)
      above to redeem the Rights, or the Board of Directors elects under Section
      5.1(1) above or Section 5.1(8) below to redeem the Rights, the Trust shall
      give notice of redemption to the holders of the then outstanding Rights by
      mailing  such  notice to all such  holders at their  last  address as they
      appear upon the Rights  Register or, prior to the Separation  Time, on the
      registry books of the transfer agent for the Trust Units. Any notice which
      is mailed in the manner herein provided shall be deemed given,  whether or
      not the holder  receives the notice.  Each such notice of redemption  will
      state the  method by which the  payment  of the  Redemption  Price will be
      made.  The Trust may not redeem,  acquire or purchase for value any Rights
      at any time in any manner other than that  specifically  set forth in this
      Section 5.1 and other than in connection  with the purchase of Trust Units
      prior to the Separation Time.

(8)   Where a Take-over Bid that is not a Permitted Bid Acquisition is withdrawn
      or otherwise  terminated  after the Separation Time has occurred and prior
      to the occurrence of a Flip-in Event,  the Board of Directors may elect to
      redeem all the outstanding Rights at the Redemption Price.

(9)   Upon the Rights being redeemed  pursuant to Section 5.1(8) above,  all the
      provisions of this Agreement  shall continue to apply as if the Separation
      Time had not occurred and Rights  Certificates  representing the number of
      Rights held by each  holder of record of Trust Units as of the  Separation
      Time had not been mailed to each such holder and for all  purposes of this
      Agreement the Separation Time shall be deemed not to have occurred.

Section 5.2 Expiration.

      No person shall have any rights  whatsoever  pursuant to or arising out of
this Agreement or in respect of any Right after the Expiration Time,  except the
Rights Agent as specified in Section 4.1(1) hereof.

Section 5.3 Issuance of New Rights Certificates.

      Notwithstanding  any of the  provisions of this Agreement or of the Rights
to the  contrary,  the Trust may, at its option,  issue new Rights  Certificates
evidencing Rights in

<PAGE>

                                     - 40 -

      such form as may be  approved  by the Board of  Directors  to reflect  any
      adjustment  or  change  in the  number  or kind  or  class  of  securities
      purchasable upon exercise of Rights made in accordance with the provisions
      of this Agreement.

Section 5.4 Supplements and Amendments.

(1)   The Trust may,  prior to any meeting of the holders of Trust Units  called
      to approve the amendment and  restatement of this Agreement  substantially
      in  the  form  hereof,  supplement,  amend,  vary  or  rescind  any or all
      provisions of this Agreement  without the approval of any holder of Rights
      or Trust Units. Thereafter,  the Trust may from time to time supplement or
      amend this  Agreement  without  the  approval  of any holders of Rights or
      Trust Units to correct any clerical or typographical  error or to maintain
      the validity of the  Agreement  as a result of a change in any  applicable
      legislation or regulations thereunder.

      Notwithstanding   anything  in  this  Section  5.4  to  the  contrary,  no
      supplement,  amendment or  variation  shall be made to the  provisions  of
      Article 4 hereof except with the written  concurrence  of the Rights Agent
      to such supplement or amendment.

(2)   Subject to Section 5.4(1) above,  the Trust may, with the prior consent of
      the holders of Trust Units obtained as set forth below,  at any time prior
      to the Separation  Time,  amend,  vary or rescind any of the provisions of
      this Agreement and the Rights (whether or not such action would materially
      adversely affect the interests of the holders of Rights  generally).  Such
      consent  shall be deemed to have been given if  provided by the holders of
      Trust  Units at a meeting of the  holders of Trust  Units,  which  meeting
      shall be called and held in compliance with applicable laws and regulatory
      requirements and the requirements in the Declaration of Trust.  Subject to
      compliance with any requirements  imposed by the foregoing,  consent shall
      be deemed to have  been  given if the  proposed  amendment,  variation  or
      rescission is approved by the affirmative  vote of a majority of the votes
      cast by all holders of Trust  Units  (other than any holder of Trust Units
      who is an Offeror  pursuant to a Take-over Bid that is not a Permitted Bid
      or  Competing  Bid with respect to all Trust Units  Beneficially  Owned by
      such Person), represented in person or by proxy at the meeting.

(3)   The Board of  Directors  may,  with the prior  consent  of the  holders of
      Rights,  at any time after the  Separation  Time and before the Expiration
      Time, amend,  vary,  supplement or rescind any or all of the provisions of
      this Agreement and the Rights (whether or not such action would materially
      adversely affect the interests of the holders of Rights generally).

(4)   Any  approval of the holders of Rights  shall be deemed to have been given
      if the action  requiring  such approval is  authorized by the  affirmative
      votes of the

<PAGE>

                                     - 41 -

      holders of Rights  present or represented at and entitled to be voted at a
      meeting of the holders of Rights and  representing a majority of the votes
      cast in respect thereof.  For the purposes hereof,  each outstanding Right
      (other than Rights which are void pursuant to the provisions hereof) shall
      be entitled to one vote, and the  procedures for the calling,  holding and
      conduct  of the  meeting  shall be those,  as nearly as may be,  which are
      provided  in the  Declaration  of Trust  with  respect to a meeting of the
      holders of Trust Units.

(5)   The Trust shall be  required  to provide  the Rights  Agent with notice in
      writing of any such  amendment,  variation or rescission to this Agreement
      as referred to in this  Section  5.4 within  five days of  effecting  such
      amendment, variation or rescission.

(6)   Any supplements or amendments made by the Trust to this Agreement pursuant
      to Section  5.4(1)  above which are  required to maintain  the validity of
      this Agreement as a result of any change in any applicable  legislation or
      regulations thereunder shall:

      (a)   if made before the  Separation  Time, be submitted to the holders of
            Trust Units at the next meeting of holders of Trust Units,  and such
            holders may, by  resolution  passed by the  majority  referred to in
            Section 5.4(2) above, confirm or reject such amendment; and

      (b)   if made after the  Separation  Time,  be submitted to the holders of
            Rights  at a  meeting  to be  called  for on a date not  later  than
            immediately following the date of the next meeting of the holders of
            Trust Units and the holders of Rights may, by  resolution  passed by
            the majority referred to in Section 5.4(4) above,  confirm or reject
            such amendment.

      A supplement or amendment of the nature referred to in this Section 5.4(6)
      shall  be  effective  from  the  date of the  resolution  of the  Board of
      Directors  adopting such  supplement or amendment until it is confirmed or
      rejected  or until it ceases to be  effective  (as  described  in the next
      sentence)  and,  where such  supplement  or  amendment  is  confirmed,  it
      continues  in  effect  in the form so  confirmed.  If such  supplement  or
      amendment  is  rejected  by the  holders of Trust  Units or the holders of
      Rights or is not submitted to the holders of Trust Units or the holders of
      Rights as required,  then such  supplement or amendment  shall cease to be
      effective  from and after the  termination  of the meeting at which it was
      rejected or to which it should have been but was not submitted or from and
      after the date of the meeting of the holders of Trust Units or the holders
      of  Rights  that  should  have been but was not  held,  and no  subsequent
      resolution  of the  Board  of  Directors  to  amend,  vary or  delete  any
      provision  of this  Agreement  to  substantially  the same effect shall be
      effective  until confirmed by the holders of Trust Units or the holders of
      Rights, as the case may be.

<PAGE>

                                     - 42 -

Section 5.5 Fractional Rights and Fractional Units.

(1)   The  Trust  shall  not be  required  to issue  fractions  of  Rights or to
      distribute Rights  Certificates which evidence fractional Rights. Any such
      fractional  Right  shall be null and void and the Trust  will not have any
      obligation or liability in respect thereof.

(2)   The Trust shall not be required to issue fractions of Trust Units or other
      securities upon exercise of the Rights or to distribute certificates which
      evidence  fractional Trust Units or other  securities.  In lieu of issuing
      fractional  Trust  Units or other  securities,  the Trust shall pay to the
      registered  holders  of Rights  Certificates  at the time such  Rights are
      exercised as herein provided, an amount in cash equal to the same fraction
      of the Market Price of one Trust Unit.

Section 5.6 Rights of Action.

      Subject to the terms of this Agreement, all rights of action in respect of
this  Agreement,  other than rights of action vested solely in the Rights Agent,
are  vested  in the  respective  registered  holders  of  the  Rights;  and  any
registered  holder of any Rights,  without the consent of the Rights Agent or of
the registered holder of any other Rights,  may, on such holder's own behalf and
for such  holder's  own  benefit  and the  benefit  of other  holders  of Rights
enforce,  and may institute and maintain any suit, action or proceeding  against
the Trust to enforce,  or otherwise  act in respect of, such  holder's  right to
exercise such  holder's  Rights in the manner  provided in such holder's  Rights
Certificate  and in  this  Agreement.  Without  limiting  the  foregoing  or any
remedies  available to the holders of Rights,  it is  specifically  acknowledged
that the  holders  of Rights  would not have an  adequate  remedy at law for any
breach of this  Agreement  and will be entitled to specific  performance  of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.

Section 5.7 Notice of Proposed Actions.

      In case the Trust shall propose after the Separation Time and prior to the
Expiration  Time to effect the  liquidation,  dissolution  or  winding-up of the
Trust or the sale of all or  substantially  all of the Trust's assets,  then, in
each such case,  the Trust shall give to each holder of a Right,  in  accordance
with Section 5.8 hereof, a notice of such proposed  action,  which shall specify
the date on which such liquidation,  dissolution, winding up, or sale is to take
place,  and such notice  shall be so given at least  twenty (20)  Business  Days
prior to the date of taking of such proposed action.

Section 5.8 Notices.

(1)   Notices or demands authorized or required by this Agreement to be given or
      made by the Rights Agent or by the holder of any Rights to or on the Trust
      shall be  sufficiently  given or made if delivered or sent by  first-class
      mail,  postage

<PAGE>

                                     - 43 -

      prepaid,  addressed  (until  another  address is filed in writing with the
      Rights Agent) as follows:

            PrimeWest Energy Trust
            c/o PrimeWest Energy Inc.
            5100, 150 - 6th Avenue S.W.
            Calgary, Alberta  T2P 3Y7

            Attention:       President and Chief Executive Officer
            Facsimile No.:   (403) 699-7474

(2)   Any notice or demand  authorized or required by this Agreement to be given
      or made by the Trust or by the  holder of any  Rights to or on the  Rights
      Agent  shall  be  sufficiently  given  or  made  if  delivered  or sent by
      first-class  mail,  postage  prepaid,  addressed (until another address is
      filed in writing with the Trust) as follows:

            Computershare Trust Company of Canada
            Suite 710
            530 - 8th Avenue S.W.
            Calgary, Alberta  T2P 3S8

            Attention:       Manager, Corporate Trust Department
            Facsimile No.:   (403) 267-6598

(3)   Notices or demands authorized or required by this Agreement to be given or
      made by the Trust or the  Rights  Agent to or on the  holder of any Rights
      shall be  sufficiently  given or made if delivered or sent by  first-class
      mail,  postage  prepaid,  addressed  to such holder at the address of such
      holder as it appears upon the Rights  Register or, prior to the Separation
      Time, on the registry books of the transfer agent for the Trust Units.

(4)   Any notice  given or made in  accordance  with this  Section  5.8 shall be
      deemed  to  have  been  given  and to  have  been  received  on the day of
      delivery,  if so delivered,  on the third Business Day (excluding each day
      during which there exists any general  interruption  of postal service due
      to strike,  lockout or other cause) following the mailing  thereof,  if so
      mailed,  and on the day of faxing  (providing  such  sending is during the
      normal  business  hours of the  addressee on a Business Day and if not, on
      the first Business Day thereafter). Each of the Trust and the Rights Agent
      may from time to time change its address for notice by notice to the other
      given in the manner aforesaid.

(5)   If mail service is or is threatened to be  interrupted  at a time when the
      Trust or the Rights Agent  wishes to give a notice or demand  hereunder to
      or on the  holders  of the  Rights,  the Trust or the  Rights  Agent  may,
      notwithstanding the foregoing

<PAGE>
                                     - 44 -

      provisions of this Section 5.8, give such notice by means,  of publication
      once  in each of two  successive  weeks  in the  business  section  of the
      National  Post or in such  other  publication  or  publications  as may be
      designated  by the Trust and notice so  published  shall be deemed to have
      been given on the date on which the first  publication  of such  notice in
      any such publication has taken place.

Section 5.9 Successors.

      All the covenants and  provisions of this  Agreement by or for the benefit
of the Trust or the Rights  Agent  shall bind and enure to the  benefit of their
respective successors and assigns hereunder.

Section 5.10 Benefits of this Agreement.

      Nothing in this  Agreement  shall be construed to give to any Person other
than the  Trust,  the  Rights  Agent and the  holders of the Rights any legal or
equitable right, remedy or claim under this Agreement;  but this Agreement shall
be for the sole and  exclusive  benefit of the Trust,  the Rights  Agent and the
holders of the Rights.

Section 5.11 Governing Law.

      This  Agreement  and each Right issued  hereunder  shall be deemed to be a
contract  made under the laws of Alberta and for all purposes  shall be governed
by and construed in accordance with the laws of such province.

Section 5.12 Severability.

      If any  Section,  Clause,  term or  provision  hereof  or the  application
thereof to any  circumstances  or any right hereunder shall, in any jurisdiction
and to any extent, be invalid or unenforceable,  such Section,  Clause,  term or
provision or such right shall be ineffective  only in such  jurisdiction  and to
the extent of such invalidity or unenforceability  in such jurisdiction  without
invalidating or rendering  unenforceable or ineffective the remaining  Sections,
Clauses, terms and provisions hereof or rights hereunder in such jurisdiction or
the application of such Section,  Clause,  term or provision or rights hereunder
in any other jurisdiction or to circumstances other than those as to which it is
specifically held invalid or unenforceable.

Section 5.13 Effective Date.

      This  Agreement  is effective  and in full force and effect in  accordance
with its terms and  conditions  as of and from  March 31,  1999 (the  "Effective
Date").  If this Agreement is not confirmed  annually by a majority of the votes
cast by  holders  of Trust  Units  permitted  to vote on such  resolution  under
Section 5.4 hereof who vote in respect of the confirmation of this Agreement, in
person or by proxy at a meeting of  holders  of Trust  Units to be held no later
than  August  31 in each  calendar  year,  then  this  Agreement  and  any  then
outstanding  Rights shall be of no further  force and effect from the earlier of
the close of business  on the date of such  meeting and the close of business on
August 31 of such year.

<PAGE>

                                     - 45 -

Section 5.14 Determinations and Actions by the Board of Directors.

(1)   The Board of Directors  shall have the  exclusive  power and  authority to
      administer   this   Agreement  and  to  exercise  all  rights  and  powers
      specifically  granted to the Board of  Directors or to the Trust as may be
      necessary or advisable in the administration of this Agreement.

(2)   All such actions, calculations and determinations (including all omissions
      with  respect  to the  foregoing)  which  are done or made by the Board of
      Directors,  in good faith, shall not subject the Board of Directors or any
      director of the Corporation to any liability to the holders of the Rights.

Section 5.15 Rights of Board, Trust and Offeror.

      Without limiting the generality of the foregoing, nothing contained herein
shall be construed to suggest or imply that the Board of Directors  shall not be
entitled to recommend that holders of Trust Units reject or accept any Take-over
Bid or take any other action (including,  without limitation,  the commencement,
prosecution,  defence or  settlement  of any  litigation  and the  submission of
additional or alternative  Take-over  Bids or other  proposals to the holders of
Trust Units) with respect to any  Take-over  Bid or otherwise  that the Board of
Directors  believes is necessary or appropriate in the exercise of its fiduciary
duties.

Section 5.16 Regulatory Approvals.

      Any  obligation  of the  Trust or  action  or event  contemplated  by this
Agreement  shall be subject to the prior  receipt of any  requisite  approval or
consent  from  any  governmental  or  regulatory  authority  including,  without
limiting  the  generality  of  the  foregoing,  any  necessary  approval  of any
securities regulatory authority or stock exchange.

Section 5.17 Declaration as to Non-Canadian Holders.

      If in the opinion of the Board of Directors  (who may rely upon the advice
of counsel) any action or event  contemplated  by this  Agreement  would require
compliance with the securities laws or comparable  legislation of a jurisdiction
outside  Canada,  the  Board of  Directors  acting  in good  faith may take such
actions as it may deem appropriate to ensure such compliance.  In no event shall
the  Trust or the  Rights  Agent be  required  to issue  or  deliver  Rights  or
securities issuable on exercise of Rights to Persons who are citizens, residents
or  nationals  of any  jurisdiction  other  than  Canada in which  such issue or
delivery  would be unlawful  without  registration  of the  relevant  Persons or
securities for such purposes.

Section 5.18 Time of the Essence.

      Time shall be of the essence in this Agreement.

<PAGE>

                                     - 46 -

Section 5.19 Contracts of the Trust.

      The parties hereto acknowledge that the obligations of the Trust hereunder
shall not be personally  binding upon the Trustee or any of the holders of Trust
Units from time to time and that any recourse  against the Trust, the Trustee or
any  holder  of  Trust  Units  in any  manner  in  respect  of an  indebtedness,
obligation or liability of the Trust arising  hereunder or arising in connection
herewith or from the matters to which this Agreement relates,  if any, including
without limitation claims based on negligence or otherwise  tortious  behaviour,
shall be limited to, and  satisfied  only out of, the Trust Fund,  as defined in
the Declaration of Trust.

Section 5.20 Execution in Counterparts.

      This Agreement may be executed in any number of  counterparts  and each of
such  counterparts  shall for all purposes be deemed to be an original,  and all
such counterparts shall together constitute one and the same instrument.

      IN WITNESS WHEREOF, the parties have executed this Agreement.

                                        PRIMEWEST ENERGY TRUST,
                                        by its authorized attorney,
                                        PRIMEWEST ENERGY INC.

                                           By: /s/
                                               ---------------------------------
                                               Authorized Signing Officer

                                           By: /s/
                                               ---------------------------------
                                               Authorized Signing Officer

                                        COMPUTERSHARE TRUST COMPANY OF CANADA

                                           By: /s/
                                               ---------------------------------
                                               Authorized Signing Officer

                                           By: /s/
                                               ---------------------------------
                                               Authorized Signing Officer

<PAGE>

                              SCHEDULE "2.2(3)(a)"

                          [FORM OF RIGHTS CERTIFICATE]

Certificate No. ____________                                  ___________ Rights

                  THE RIGHTS ARE  SUBJECT  TO  REDEMPTION,  AT THE OPTION OF THE
                  TRUST, ON THE TERMS SET FORTH IN THE RIGHTS  AGREEMENT.  UNDER
                  CERTAIN  CIRCUMSTANCES  (SPECIFIED  IN  SECTION  3.1(2) OF THE
                  RIGHTS AGREEMENT),  RIGHTS  BENEFICIALLY OWNED BY AN ACQUIRING
                  PERSON,  ANY  PERSON  ACTING  JOINTLY  OR IN  CONCERT  WITH AN
                  ACQUIRING PERSON OR THEIR RESPECTIVE ASSOCIATES AND AFFILIATES
                  (AS SUCH TERMS ARE DEFINED IN THE RIGHTS  AGREEMENT) AND THEIR
                  RESPECTIVE  TRANSFEREES  SHALL BECOME VOID WITHOUT ANY FURTHER
                  ACTION.

                               RIGHTS CERTIFICATE

      This  certifies  that   _______________  or  registered  assigns,  is  the
registered holder of the number of Rights set forth above each of which entitles
the registered holder thereof,  subject to the terms,  provisions and conditions
of the Amended and Resated  Unitholder  Rights Plan Agreement  dated May 5, 2005
(the "Rights  Agreement"),  between  PrimeWest  Energy Trust, a trust  organized
under the laws of Alberta (the  "Trust"),  and  Computershare  Trust  Company of
Canada, a trust company  incorporated  under the laws of Canada, as rights agent
(the "Rights Agent",  which term shall include any successor  Rights Agent under
the  Rights  Agreement)  to  purchase  from  the  Trust at any  time  after  the
Separation  Time (as such term is defined in the Rights  Agreement) and prior to
the close of  business  on the  Expiration  Date (as such term is defined in the
Rights Agreement) one fully paid and  non-assessable  Trust Unit of the Trust (a
"Trust Unit") at the Exercise Price  referred to below,  upon  presentation  and
surrender  of this  Rights  Certificate  together  with the Form of  Election to
Exercise  duly  executed  and  submitted  to the Rights  Agent at its  principal
offices in any of Toronto and  Calgary.  The Exercise  Price shall  initially be
$100.00  (Canadian)  per Right and shall be  subject  to  adjustment  in certain
events as provided in the Rights Agreement.

      In certain  circumstances  described in the Rights  Agreement,  each Right
evidenced  hereby may  entitle  the  registered  holder  thereof to  purchase or
receive assets,  debt  securities or other equity  securities of the Trust (or a
combination thereof) all as provided in the Rights Agreement.

<PAGE>

                                      - 2 -

      This Rights  Certificate  is subject to all of the terms,  provisions  and
conditions of the Rights Agreement,  which terms,  provisions and conditions are
hereby  incorporated  herein by  reference  and made a part  hereof and to which
Rights Agreement  reference is hereby made for a full description of the rights,
limitations  of rights,  obligations,  duties and  immunities  thereunder of the
Rights  Agent,  the Trust and the  holders of the  Rights.  Copies of the Rights
Agreement  are on file at the  registered  office of the Trust and are available
upon written request.

      This Rights Certificate,  with or without other Rights Certificates,  upon
surrender at any of the offices of the Rights Agent designated for such purpose,
may be exchanged for another Rights  Certificate or Rights  Certificates of like
tenor and date evidencing an aggregate  number of Rights entitling the holder to
purchase a like aggregate  number of Trust Units as the Rights  evidenced by the
Rights  Certificate  or  Rights   Certificates   surrendered.   If  this  Rights
Certificate  shall be exercised in part, the registered holder shall be entitled
to  receive,  upon  surrender  hereof,  another  Rights  Certificate  or  Rights
Certificates for the number of whole Rights not exercised.

      Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Rights Certificate may be, and under certain  circumstances are required to
be, redeemed by the Trust at a redemption price of $0.00001 per Right.

      No fractional Trust Units will be issued upon the exercise of any Right or
Rights evidenced hereby.

      No holder of this Rights Certificate,  as such, shall be entitled to vote,
receive  distributions or be deemed for any purpose the holder of Trust Units or
of any other  securities of the Trust which may at any time be issuable upon the
exercise hereof,  nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder  hereof any of the rights of a unitholder
of the  Trust or any right to vote for the  election  of  directors  or upon any
matter submitted to unitholders of the Trust at any meeting thereof,  or to give
or  withhold  consent to any action,  or to receive  notice of meetings or other
actions affecting  unitholders of the Trust (except as expressly provided in the
Rights  Agreement),  or to receive  distributions  or  subscription  rights,  or
otherwise until the Rights evidenced by this Rights  Certificate shall have been
exercised as provided in the Rights Agreement.

      This Rights  Certificate  shall not be valid or obligatory for any purpose
until it shall have been manually countersigned by the Rights Agent.

      WITNESS the facsimile signature of the proper officers of PrimeWest Energy
Inc. who have been authorized to sign this certificate on behalf of the Trust.

Dated o

<PAGE>

                                      - 3 -

                                        PRIMEWEST ENERGY TRUST,
                                        by its authorized attorney,
                                        PRIMEWEST ENERGY INC.

                                        By:     ____________________________

                                                 Authorized Signing Officer

                                        By:     ____________________________

                                                Authorized Signing Officer

                                        COMPUTERSHARE TRUST COMPANY OF CANADA

                                        By:     ____________________________

                                                Authorized Signing Officer

                                        By:     ____________________________

                                                Authorized Signing Officer

<PAGE>

                   (To be attached to each Rights Certificate)

                          FORM OF ELECTION TO EXERCISE

TO:   PRIMEWEST ENERGY TRUST

      The undersigned  hereby  irrevocably  elects to exercise  __________ whole
Rights  represented  by the attached  Rights  Certificate  to purchase the Trust
Units  issuable upon the exercise of such Rights and requests that  certificates
for such Trust Units be issued to:

                          ____________________________
                                     (NAME)

                          ____________________________
                                    (ADDRESS)

                          ____________________________
                          (CITY AND STATE OR PROVINCE)

      If such  number of Rights  shall not be all the Rights  evidenced  by this
Rights  Certificate,  a new Rights  Certificate  for the  balance of such Rights
shall be registered in the name of and delivered to:

                          ____________________________
                                     (NAME)

                          ____________________________
                                    (ADDRESS)

                          ____________________________
                          (CITY AND STATE OR PROVINCE)

          ____________________________________________________________
           SOCIAL INSURANCE, SOCIAL SECURITY OR OTHER TAXPAYER NUMBER

Dated ___________________________

Signature Guaranteed    _________________________________________________
                        Signature

                        (Signature  must  correspond to name as written upon the
                        face of this  Rights  Certificate  in every  particular,
                        without   alteration  or   enlargement   or  any  change
                        whatsoever)

<PAGE>

                                      - 2 -

      Signature  must be  guaranteed  by a Canadian  chartered  bank, a Canadian
trust  company or a member of a  recognized  stock  exchange  or a member of the
Transfer Association Medallion (Stamp) Program.

                            [To be completed if true]

      The  undersigned  hereby  represents,  for the  benefit of all  holders of
Rights and Trust Units, that the Rights evidenced by this Rights Certificate are
not, and, to the  knowledge of the  undersigned,  have never been,  Beneficially
Owned by an Acquiring Person or an Affiliate or Associate  thereof or any Person
acting  jointly or in consent  with any of the  foregoing  or any  Affiliate  or
Associate of such Person (as defined in the Rights Agreement).
                            _____________________________________
                            Signature

                                     NOTICE

      In the  event  the  certification  set  forth in the Form of  Election  to
Exercise  is not  completed,  the Trust  will deem the  Beneficial  Owner of the
Rights  evidenced by this Rights  Certificate  to be an  Acquiring  Person or an
Affiliate  or  Associate  thereof  (as  defined  in the  Rights  Agreement)  and
accordingly such Rights shall be null and void.

<PAGE>

                               FORM OF ASSIGNMENT

                (To be executed by the registered holder if such
               holder desires to transfer the Rights Certificate)

FOR VALUE RECEIVED  ______________________________________________ hereby sells,
assigns and transfers unto ______________________________________________

               ________________________________________________________
               (Please print name and address of transferee)

the Rights  represented  by this Rights  Certificate,  together  with all right,
title and interest  therein and does hereby  irrevocably  constitute and appoint
_____________________________  as attorney to transfer the within  Rights on the
books of the Trust, with full power of substitution.

Dated __________________________

Signature Guaranteed    _________________________________________________
                        Signature

                        (Signature  must  correspond to name as written upon the
                        face of this  Rights  Certificate  in every  particular,
                        without   alteration  or   enlargement   or  any  change
                        whatsoever)

      Signature  must be guaranteed by a Canadian  chartered  bank, or Medallion
guaranteed  by a  Canadian  trust  company  or a member  of a  recognized  stock
exchange or a member of the Transfer Association Medallion (Stamp) Program.

                            [To be completed if true]

      The  undersigned  hereby  represents,  for the  benefit of all  holders of
Rights and Trust Units, that the Rights evidenced by this Rights Certificate are
not and, to the  knowledge  of the  undersigned,  have never been,  Beneficially
Owned by an Acquiring Person or an Affiliate or Associate  thereof or any Person
acting jointly or in consent with any of the foregoing (as defined in the Rights
Agreement).

                        _________________________________________________
                        Signature

<PAGE>

                                      - 2 -

                                     NOTICE

      In the event the  certification set forth in the Form of Assignment is not
completed,  the Trust will deem the Beneficial  Owner of the Rights evidenced by
this Rights  Certificate to be an Acquiring  Person or an Affiliate or Associate
thereof (as defined in the Rights  Agreement) and accordingly  such Rights shall
be null and void.

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