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We own a diverse mix of operated and non-operated conventional oil and gas assets in western Canada. These assets provide valuable insights across the industry and an expanded opportunity set across all commodity types. Key opportunities include deep gas developments in the Deep Basin and Foothills areas of western Alberta and conventional oil development at Bantry North in southern Alberta and various areas in southeast Saskatchewan. Other conventional oil and gas represents approximately 55% of our production and 34% of our reserves.

2005 Activity
We invested $143 million in other conventional oil and gas development and added initial production of 6,100 BOE/day during 2005 at an on-stream cost of $23,500/BOE/day. Development activities included the drilling of 303 gross wells (60.6 net) including a majority of non-operated wells.

Deep Basin
In the Deep Basin/Foothills areas, development is dominated by deep (up to 4,500 metres), expensive and high impact, non-operated, natural gas wells. While these areas can be technically challenging, they offer attractive economics and long-life production that is ideal for a trust. We have pursued a strategy of selectively aligning with top-tier operators through minor working interest positions that mitigate risk and leverage off of external technical expertise.

In the Deep Basin/Foothills regions, we invested approximately $28 million to participate in drilling 87 gross wells (6.2 net) and added approximately 1,600 BOE/day of new production at an on-stream cost of $17,400/BOE/day. In December, our net production from the Deep Basin was 8,500 BOE/day.

Bantry North
We acquired a 100% WI and operatorship in the Bantry North heavy oil property as part of the ChevronTexaco acquisition in mid 2004. The oil production comes from the Sunburst formation and is supported by a natural water drive. Considerable development opportunities exist at this property through infill drilling and well/facility optimization activities.

At Bantry North, we invested approximately $25 million to drill 8 100% WI wells and installed facilities to handle existing and future incremental production. During 2005, approximately 850 BOE/day of incremental production was added for an on-stream cost of $29,400/BOE/day. An additional 1,400 BOE/day of production from these new wells is expected to be on stream during the first quarter of 2006 following the completion and start-up of a non-operated sour gas facility and meter station.

Southeast Saskatchewan
Key conventional oil properties in southeast Saskatchewan include Tatagwa, Colgate, Heward, Neptune and Routledge, Manitoba. Production originates from the early carbonates of the Mississippian era and is generally pressure supported by natural water drive. Oil is medium density and increasing oil prices have created an environment for additional development drilling opportunities at attractive economics despite relatively high oil differentials for medium density crude.

In 2005, we invested $9.6 million to drill 8 gross wells (6.5 net) and added 650 BOE/day of incremental production at a cost of $14,800/BOE/day. In December, the production from this area was approximately 1,100 BOE/day.

Another emerging conventional gas development area is Shekelie in northeast British Columbia. In 2005, we completed and tested two existing wells (50% WI) for production in the Slave Point formation with positive results. We are proceeding with construction of facilities and a pipeline to tie in these wells and expect initial net production of 1.6 MMcf/day to come on stream by mid-2006. We have purchased approximately 20 gross (50% WI) sections of land directly offsetting these wells, bringing our land inventory in the area to 32 gross (50% WI) sections. Pending results of a 3-D seismic program, we plan to drill additional wells in 23007 to delineate the Slave Point formation and evaluate other prospective zones.

2006 Outlook
We plan to invest over $164 million on development activities at other conventional oil and gas properties in 2006, including the drilling of over 235 gross wells (80 net).

Key development activities include the following:

• Drilling 80 gross gas wells (10 net) at the Deep Basin/Foothills areas ($38 million).
• Drilling 19 gross oil wells (13 net) in southeast Saskatchewan ($22 million).
• Drilling 6 horizontal oil wells and upgrading existing pumps at Bantry North ($10 million).