Provident Energy Trust and Provident Energy Ltd.

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Exemption granted from the requirement to include financial statements in an information circular for an entity participating in an arrangement -- the information circular will be sent to the Trust's unitholders in connection with a proposed internal reorganization pursuant to which its business operations will be conducted through a corporate entity -- the corporate entity will own, directly or indirectly, all of the existing assets and assume all of the existing liabilities of the Trust and PEL and its sole business will be the current business of the Trust.

Exemption granted from the current annual financial statement and current AIF short form prospectus qualification criteria and the requirement to file a notice declaring its intention to be qualified to file a short form prospectus at least 10 business days prior to the filing of a preliminary short form prospectus - relief granted as disclosure regarding the predecessor issuer will effectively be the disclosure of Trust - the Trust is qualified to file a short form prospectus.

Applicable Legislative Provisions

National Instrument 51-102 Continuous Disclosure Obligations, s. 13.1 -- Information circular.

National Instrument 44-101 Short Form Prospectus Distributions, s. 8.1 -- Qualification.

National Instrument 44-101 Short Form Prospectus Distributions, s. 8.1 -- 10 day notice.

Citation: Provident Energy Trust, Re, 2010 ABASC 501

October 27, 2010

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ALBERTA AND ONTARIO

(the Jurisdictions)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

PROVIDENT ENERGY TRUST (THE TRUST) AND

PROVIDENT ENERGY LTD.

(PEL and, together with the Trust, the Filers)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filers for a decision under the securities legislation of the Jurisdictions (the Legislation):

(a) exempting the Trust from the requirement under Section 14.2 of Form 51-102F5 Information Circular (the Circular Form) of the Legislation to provide the PEL Financial Statements (as defined below) and the PEL MD&A (as defined below) in the management information circular (the Circular) to be prepared by the Trust and delivered to the holders (Unitholders) of units of the Trust (Trust Units) in connection with a special meeting (the Meeting) of Unitholders to be held on December 1, 2010 for the purposes of, among other things, considering a plan of arrangement under the Business Corporations Act (Alberta) (the Arrangement) involving the Trust, PEL, 1564911 Alberta ULC, a wholly-owned subsidiary of PEL (Newco) and the Unitholders resulting in the internal reorganization of the Trust's trust structure into a corporate structure (the Circular Relief);

(b) exempting Provident Energy (as defined below) from the qualification criteria for short form prospectus eligibility contained in Subsection 2.2(d) of National Instrument 44-101 Short Form Prospectus Distributions (NI 44-101) following completion of the Arrangement until the earlier of: (a) March 31, 2011; and (b) the date upon which Provident Energy (as defined below) has filed both its annual financial statements and annual information form for the year ended December 31, 2010 pursuant to NI 51-102 Continuous Disclosure Obligations (NI 51-102) (the Qualification Relief); and

(c) exempting Provident Energy (as defined below) from the requirement to file a notice under Section 2.8 of NI 44-101 declaring its intention to be qualified to file a short form prospectus at least 10 business days prior to the filing of its first preliminary short form prospectus after the notice (the Prospectus Relief).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Alberta Securities Commission is the principal regulator for this Application;

(b) the Filers have provided notice that Subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador; and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filers:

THE TRUST, PEL AND NEWCO

The Trust

1. The Trust is an unincorporated open-ended trust established under the laws of the Province of Alberta and created pursuant to a trust indenture dated January 25, 2001, as amended (the Trust Indenture) between a predecessor of Computershare Trust Company of Canada (Computershare) and a predecessor of PEL. The principal office of the Trust is located in Calgary, Alberta.

2. Computershare is the trustee of the Trust, PEL is the administrator of the Trust and the beneficiaries of the Trust are the Unitholders.

3. The authorized capital of the Trust includes an unlimited number of Trust Units and special voting units. As at October 20, 2010, there were 267,460,369 Trust Units and no special voting units outstanding.

4. The Trust is a reporting issuer or the equivalent under the securities legislation of each of the provinces of Canada. To its knowledge, the Trust is not in default of securities legislation in any jurisdiction of Canada.

5. The Trust Units are listed on the Toronto Stock Exchange (TSX) under the symbol "PVE.UN" and on the New York Stock Exchange (NYSE) under the symbol PVX.

6. As of October 20, 2010, the Trust had outstanding approximately $99.0 million aggregate principal amount of 6.5 percent convertible unsecured subordinated debentures of the Trust issued on March 1, 2005 (the Initial 6.5 Percent Debentures). The Initial 6.5 Percent Debentures mature on August 31, 2012 and bear interest at a rate of 6.5 percent per annum. The Initial 6.5 Percent Debentures are listed on the TSX under the symbol "PVE.DB.C".

7. As of October 20, 2010, the Trust had outstanding approximately $150.0 million aggregate principal amount of supplemental 6.5 percent convertible unsecured subordinated debentures of the Trust issued on November 15, 2005 (the Supplemental 6.5 Percent Debentures). The Supplemental 6.5 Percent Debentures mature on April 30, 2011 and bear interest at a rate of 6.5 percent per annum. The Supplemental 6.5 Percent Debentures are listed on the TSX under the symbol "PVE.DB.D".

8. The Trust has filed a "current AIF" and has "current annual financial statements" (as such terms are defined in NI 44-101) for the financial year ended December 31, 2009.

PEL

9. PEL is a corporation amalgamated under the laws of the Province of Alberta. The principal office of PEL is located in Calgary, Alberta.

10. PEL is wholly-owned by the Trust.

11. PEL is a reporting issuer in British Columbia, Alberta, Saskatchewan, Ontario and Québec. Pursuant to a Mutual Reliance Review System decision document dated January 5, 2005 (the MRRS Decision Document), PEL is relieved from the continuous disclosure obligations of NI 51-102 and certain other disclosure requirements subject to certain conditions. PEL continues to satisfy the conditions set out in the MRRS Decision Document and is not in default of applicable securities legislation in any jurisdiction of Canada.

12. The authorized capital of PEL consists of an unlimited number of common shares of PEL (PEL Common Shares), Exchangeable Shares, issuable in series, Series A Exchangeable Shares, Series B Exchangeable Shares, Series C Exchangeable Shares and Series D Exchangeable Shares. As of the date hereof, there is one PEL Common Share issued and outstanding, which is held by the Trust. There are no Exchangeable Shares, issuable in series, Series A Exchangeable Shares, Series B Exchangeable Shares, Series C Exchangeable Shares and Series D Exchangeable Shares issued and outstanding.

13. The issued and outstanding PEL Common Shares are not listed or posted for trading on any exchange or quotation and trade reporting system. PEL has no securities listed on any exchanges.

14. The principal business of PEL is to manage and administer the operating activities associated with the natural gas liquids midstream processing and marketing business held by the Trust's various subsidiaries. The board of directors of PEL has generally been delegated the significant management decisions of the Trust and supervises the management of the business and affairs of the Trust.

Newco

15. Newco is an unlimited liability corporation incorporated under the ABCA for the sole purpose of participating in the Arrangement. The principal office of Newco is located in Calgary, Alberta.

16. Newco is a wholly-owned subsidiary of PEL. Newco is not a reporting issuer in any jurisdiction.

ARRANGEMENT

17. As part of the Arrangement, (i) PEL and Newco will be amalgamated to form Provident Energy Ltd. (Provident Energy) at which time PEL will cease to become a reporting issuer; (ii) Trust Units held by Unitholders will be sold, transferred and assigned to Provident Energy (free of any claims) in exchange for the issuance by Provident Energy to Unitholders of fully paid and non-assessable common shares in the capital of Provident Energy (Provident Energy Common Shares) on the basis of one fully paid and non-assessable Provident Energy Common Share for each one Trust Unit so exchanged; (iii) all of the property of the Trust will be transferred to Provident Energy, Provident Energy will assume all of the liabilities and obligations of the Trust, Provident Energy will dispose of all of its interest as a beneficiary under the Trust, and the Trust will be dissolved; and (iv) Provident Energy will own, directly or indirectly, all of the existing assets and assume all of the existing liabilities of the Trust, effectively resulting in the internal reorganization of the Trust's trust structure into a corporate structure.

18. The only securities that will be distributed to Unitholders pursuant to the Arrangement will be Provident Energy Common Shares.

19. Provident Energy will assume all covenants and obligations in respect of the Initial 6.5 Percent Debentures and the Supplemental 6.5 Percent Debentures and will enter into a supplemental debenture trust indenture with Computershare at the closing of the Arrangement. Completion of the Arrangement will constitute a "change of control" under the terms of the Initial 6.5 Percent Debentures and the Supplemental 6.5 Percent Debentures. As a result, within 30 days following the Arrangement, Provident Energy will be required to make an offer to purchase the Initial 6.5 Percent Debentures and the Supplemental 6.5 Percent Debentures at a price of 101% of the principal amount. Provided the Arrangement is completed, holders of the Initial 6.5 Percent Debentures and the Supplemental 6.5 Percent Debentures will thereafter be entitled to receive Provident Energy Common Shares, rather than Trust Units, on the basis of one Provident Energy Common Share in lieu of each one Trust Unit which they were previously entitled to receive, on conversion of such debentures.

20. The rights of the holders of the Initial 6.5 Percent Debentures and the Supplemental 6.5 Percent Debentures in respect of Provident Energy following the Arrangement will be substantially equivalent to the rights the holders of Initial 6.5 Percent Debentures and the Supplemental 6.5 Percent Debentures currently have in respect of the Trust.

21. Following the completion of the Arrangement, Provident Energy will be a reporting issuer or the equivalent under the securities legislation in each of the provinces of Canada and the Provident Energy Common Shares will, subject to approval by the TSX and the NYSE, be listed for trading on the TSX and the NYSE.

22. The Arrangement does not contemplate the acquisition of any additional operating assets or the disposition of any existing operating assets.

23. Pursuant to the Trust Indenture, the Alberta Business Corporations Act and applicable securities laws, the Unitholders will be required to approve the Arrangement at the Meeting. The Arrangement must be approved by not less than two-thirds of the votes cast by Unitholders at the Meeting. The Meeting will take place on December 1, 2010 and the Circular is expected to be mailed on or about November 5, 2010.

24. The Arrangement will be a "restructuring transaction" under NI 51-102 in respect of the Trust and therefore will require compliance with Section 14.2 of the Circular Form.

25. The Arrangement involves a proposed internal reorganization of the Trust and certain of its subsidiaries through which the Trust's current trust structure will be replaced with a corporate structure. The Arrangement is being recommended in light of the fact that the transition period for the application of the changes in the tax treatment of SIFT trusts (originally announced by the Canadian Federal government on October 31, 2006) ends on December 31, 2010. If the Arrangement is approved, the Trust will be replaced by a publicly-traded, dividend-paying corporation to be known as "Provident Energy Ltd" Provident Energy will own, directly or indirectly, the same assets that the Trust owned immediately prior to the effective time of the Arrangement and Provident Energy will assume all of the obligations of the Trust.

26. While changes to the consolidated financial statements of Provident Energy will be required to reflect the new organizational structure following the Arrangement, the financial position of Provident Energy will be substantially the same as reflected in the Trust's audited annual consolidated financial statements most recently filed under Part 4 of NI 51-102 prior to the date of the Circular and the unaudited interim consolidated financial statements of the Trust's most recently filed under Part 4 of NI 51-102 prior to the date of the Circular. In particular, the entity that exists both before and subsequent to the Arrangement would be substantially the same given the fact that the assets and liabilities of the enterprise, from both an accounting perspective and economic perspective, are not changing based on the Arrangement.

27. The Arrangement will be an internal reorganization undertaken without dilution to the Trust Unitholders or additional debt or interest expense.

FINANCIAL STATEMENT AND MANAGEMENT'S DISCUSSION AND ANALYSIS DISCLOSURE IN THE CIRCULAR

28. Section 14.2 of the Circular Form requires, among other Sections, that the Circular contain the disclosure (including financial statements) prescribed under securities legislation and described in the form of prospectus that Provident Energy would be eligible to use immediately prior to the sending and filing of the Circular for a distribution of its securities.

29. As Provident Energy will be the corporation resulting from the amalgamation of PEL and Newco pursuant to the Arrangement and will not be in existence as of the date of the Circular, Subsection 32.1(a) of Form 41-101F1 Information Required in a Prospectus (the Prospectus Form) requires that the financial statements of any predecessor entity that formed the basis of the business of Provident Energy be included in the Circular. Since PEL is currently one of the principal operating entities of the Trust and will form the basis of the business of Provident Energy to be carried on following the completion of the Arrangement, the Circular must contain the disclosure in respect of PEL prescribed by the Prospectus Form.

30. Subsection 32.2(1) of the Prospectus Form requires the Trust to include certain annual financial statements of PEL in the Circular, including: (i) an income statement, a statement of retained earnings, and a cash flow statement of PEL for each of the financial years ended December 31, 2009, December 31, 2008 and December 31, 2007; and (ii) a balance sheet of PEL as at December 31, 2009 and December 31, 2008 (collectively, the PEL Annual Financial Statements). Subsection 32.3(1) of the Prospectus Form also requires the Trust to include certain comparative interim financial statements of PEL in the Circular, including: (i) an income statement, a statement of retained earnings and a cash flow statement of PEL for the interim periods ended June 30, 2010 and June 30, 2009; and (ii) a balance sheet of PEL as at the end of June 30, 2010 and December 3l, 2009 (together with the PEL Annual Financial statements, the PEL Financial Statements).

31. Sections 8.2(1)(a) and (b) and 8.2(2) of the Prospectus Form require the Trust to include MD&A corresponding to each of the financial years ended December 31, 2009 and December 31, 2008 and the interim period ended June 30, 2010 of PEL (the PEL MD&A) in the Circular.

32. Subsection 4.2(1) of NI 41-101 requires that the PEL Annual Financial Statements required to be included in the Circular must be audited in accordance with National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency.

EXEMPTIVE RELIEF SOUGHT

Circular Relief

33. The financial statements of the Trust and related MD&A are prepared on a consolidated basis, which includes the financial results for PEL. As PEL is relieved from continuous disclosure obligations of NI 51-102 and certain other disclosure requirements subject to certain conditions due to the MRRS Decision Document, PEL does not report its financial results independently from the consolidated financial statements of the Trust. To present the PEL Financial Statements and the PEL MD&A in the Circular, which would exclude accounts of the Trust, could be misleading, since there are transactions between PEL and the Trust that eliminate when consolidation is performed at the Trust level. To present the PEL Financial Statements, which would exclude the accounts of the Trust, would present the effects of only one side of the financing activities between PEL and the Trust. This would result in significant intra-group liabilities and large amounts of intra-group interest expense being reflected on the PEL Financial Statements. To present PEL excluding the Initial 6.5 Percent Debentures and the Supplemental 6.5 Percent Debentures would be potentially misleading as the debentures will be assumed by Provident Energy under the Arrangement. As a result, the presentation of these intra-group transactions, which will be eliminated upon completion of the Arrangement, would present a confusing (and potentially misleading) picture of financial performance.

34. The PEL Financial Statements and the PEL MD&A are not relevant to the Unitholders for the purposes of considering the Arrangement, as the PEL Financial Statements and the PEL MD&A, other than as discussed above, would be substantially and materially the same as the consolidated financial statements of the Trust filed in accordance with Part 4 of NI 51-102 prior to the completion of the Arrangement because the financial position of the entity that exists both before and after the Arrangement is substantially the same.

35. The Circular will contain prospectus level disclosure in accordance with the Prospectus Form (other than the PEL Financial Statements and the PEL MD&A) and will contain sufficient information to enable a reasonable Unitholder to form a reasoned judgement concerning the nature and effect of the Arrangement and the nature of the resultant public entity and reporting issuer from the Arrangement, being Provident Energy.

Qualification Relief

36. Subsection 2.7(2) of NI 44-101 contains an exemption for successor issuers from the qualification criteria for short form prospectus eligibility contained in Subsection 2.2(d) of NI 44-101, if an information circular relating to the restructuring transaction that resulted in the successor issuer was filed by the successor issuer or an issuer that was a party to the restructuring transaction, and such information circular (i) complied with applicable securities legislation, and (ii) included disclosure in accordance with Section 14.2 or 14.5 of the Circular Form of the successor issuer. Provident Energy will be a "successor issuer" (as such term is defined in NI 44-101) as a result of the Arrangement (which, as discussed above, is a restructuring transaction). The Circular will be filed by the Trust (a party to the restructuring transaction), the Circular will comply with applicable securities legislation and the Circular will include the disclosure required by Section 14.2 of the Circular Form, except for the PEL Financial Statements and the PEL MD&A which will not be included in the Circular pursuant to the Circular Relief.

Prospectus Relief

37. The Trust is qualified to file a prospectus in the form of a short form prospectus pursuant to Section 2.2 of NI 44-101 and is deemed to have filed a notice of intention to be qualified to file a short form prospectus under Subsection 2.8(4) of NI 44-101.

38. The Filers anticipate that Provident Energy may wish to file a preliminary short form prospectus following the completion of the Arrangement, relating to the offering or potential offering of securities of Provident Energy (including Provident Energy Common Shares, debt securities or subscription receipts).

39. In anticipation of the filing of a preliminary short form prospectus, and assuming the Arrangement has been completed, Provident Energy intends to file a notice of intention to be qualified to file a short form prospectus (the Notice of Intention) following completion of the Arrangement. In the absence of the Prospectus Relief, Provident Energy will not be qualified to file a preliminary short form prospectus until 10 business days from the date upon which the Notice of Intention is filed.

40. Pursuant to the qualification criteria set forth in Section 2.2 of NI 44-101 as modified by the Qualification Relief, following the Arrangement, Provident Energy will be qualified to file a short form prospectus pursuant to NI 44-101.

41. Notwithstanding Section 2.2 of NI 44-101 as modified by the Qualification Relief, Subsection 2.8(1) of NI 44-101 provides that an issuer is not qualified to file a short form prospectus unless it has filed a notice declaring its intention to be qualified to file a short form prospectus at least 10 business days prior to the issuer filing its first preliminary short form prospectus.

42. The short form prospectus of Provident Energy will incorporate by reference the documents that would be required to be incorporated by reference under Section 11 of Form 44-101F1 in a short form prospectus of Provident Energy, as modified by the Qualification Relief.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that:

(a) the Circular Relief is granted;

(b) the Qualification Relief is granted provided that any short form prospectus filed by Provident Energy pursuant to NI 44-101 during the Qualification Relief specifically incorporates by reference:

(i) the Information Circular and any financial statements and related management's discussion and analysis of the Trust incorporated by reference into the Information Circular, and

(ii) any financial statements, management's discussion and analysis, material change reports or other documents that would have to be incorporated by reference in any short form prospectus filed by the Trust; and

(c) the Prospectus Relief is granted, provided that at the time Provident Energy files its Notice of Intention, Provident Energy meets the requirements of Section 2.2 of NI 44-101, as modified by the Qualification Relief.