Provident Energy Trust

Non-Resident Unitholders

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Provident has an Enterprise Risk Management program that is designed to identify and manage risks that could negatively impact the business, operations, or results
Provident utilizes a hedging program that protects a portion of the company's cash flow and supports continued unitholder distributions, capital programs, and bank financing
Provident has an insurance program in place to mitigate the economic costs associated with risks to the business, its assets, and its people
Provident manages counterparty exposure with a credit policy that establishes limits by counterparty based on an analysis of financial information and other business factors

Risk Management activities include risk:
Identification:	Internal and external risk evaluation and mapping
Assessment:	Risk measurement by qualification and quantification
Response:	Execution determined by risk appetite and tools available
Controls:	1. Risk Management group, Risk Management Committee, Audit Committee and Board of Directors 2. Commodity Risk and Credit Policies and Procedures
Monitoring:	Provident's Risk system regularly measures mark to market and counterparty credit exposure
Communication:	Risk Management Committee, Audit Committee, Board of Directors and External

Commodity Price Risk

Commodity price volatility remains a significant risk for Provident:
- Business lines are exposed to the volatility of crude oil, natural gas, natural gas liquids (NGL), and power prices, as well as foreign exchange and interest rates
Provident executes a hedging program designed to:
- Reduce exposure to commodity price volatility,
- Protect cash flows to support payout, debt to cash flow ratios, bank lending capacity, and
- Where possible, maintain a degree of upside price participation