The fact that distributions are reinvested or premium distributions are received under the terms of the Plan does not relieve you of any liability for Canadian income taxes (or, if you are a non-resident of Canada, for any Canadian withholding taxes) that may be payable on the distribution.

Reinvestment of Distributions. The Canada Customs and Revenue Agency (the "CCRA") generally takes the position that the amount, if any, by which the fair market value of any units you acquire pursuant to the premium distribution component or the distribution reinvestment component of the Plan on the date of purchase of such units exceeds the purchase price must be included in your income for income tax purposes. The amount reinvested by you will be your cost of the units acquired under the distribution reinvestment component of the Plan plus, as described above, the amount of any income included as a result of the CCRA position relating to the discounted purchase price. Such total cost must be averaged with the cost of all other units you hold for the purpose of determining the adjusted cost base of all your units. Capital gains or losses arising on a disposition of your units will be measured by reference to the adjusted cost base of all your units.

Premium Distribution. If you elect to receive the premium distribution, the CCRA may take the position that you have sold units held as inventory (unless you have made an election under subsection 39(4) of the Income Tax Act Canada) and that you will have realized additional income for income tax purposes equal to up to 2% of the regular distribution received from Provident Energy Trust by the Agent on your behalf. No tax information will be issued for the additional cash received under the Premium Plan.

Additional summary information regarding the income tax consequences of participating in the Plan is set forth in the text of the Plan itself.

You should consult your tax advisors concerning the tax implications of your participation in the Plan having regard to your particular circumstances.