Exhibit 99.1

PROVIDENT ENERGY TRUST
CONSOLIDATED BALANCE SHEETS
Canadian dollars (000s)
(unaudited)
	As at			As at
	March 31,			December 31,
	2008			2007
Assets
Current assets
Cash and cash equivalents	$	18		$	-
Accounts receivable		323,658			338,105
Petroleum product inventory		58,983			84,638
Prepaid expenses and other current assets		4,180			8,313
Financial derivative instruments (note 8)		3,683			1,329
Assets held for sale - USOGP (note 10)		101,066			93,578
		491,588			525,963
Investments		6,794			5,862
Property, plant and equipment		2,530,866			2,510,271
Intangible assets		168,428			171,793
Goodwill		517,299			517,299
Assets held for sale - USOGP (note 10)		2,137,815			2,027,604
	$	5,852,790		$	5,758,792
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	384,324		$	347,224
Cash distributions payable		25,814			25,100
Current portion of convertible debentures (note 4)		19,382			19,198
Financial derivative instruments (note 8)		116,543			130,276
Liabilities held for sale - USOGP (note 10)		203,526			114,681
		749,589			636,479
Long-term debt - revolving term credit facilities (note 4)		889,867			923,996
Long-term debt - convertible debentures (note 4)		257,560			256,440
Asset retirement obligation (note 5)		44,112			43,886
Long-term financial derivative instruments (note 8)		223,922			146,199
Other long-term liabilities (note 7)		2,610			12,400
Future income taxes		272,306			302,089
Liabilities held for sale - USOGP (note 10)		627,304			628,502
Non-controlling interests (note 10)
Discontinued operations (USOGP)		1,107,665			1,100,136
Unitholders’ equity
Unitholders’ contributions (note 6)		2,764,597			2,750,374
Convertible debentures equity component		18,211			18,213
Contributed surplus (note 7)		801			801
Accumulated other comprehensive (loss) income		(56,718	)		(69,188	)
Accumulated income		302,258			268,642
Accumulated cash distributions		(1,351,294	)		(1,260,177	)
		1,677,855			1,708,665
	$	5,852,790		$	5,758,792
The accompanying notes are an integral part of these statements.

Provident Energy 2008 First Quarter Results

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PROVIDENT ENERGY TRUST
CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED INCOME

Canadian dollars (000s except per unit amounts) (unaudited)

	Three months ended
	March 31,
	2008			2007
				(restated - note 3)
Revenue
Revenue	$	795,425		$	540,874
Realized loss on financial derivative instruments		(30,937	)		(2,934	)
Unrealized (loss) gain on financial derivative instruments		(62,273	)		20,867
		702,215			558,807
Expenses
Cost of goods sold		544,077			385,089
Production, operating and maintenance		33,726			29,683
Transportation		8,527			6,649
Depletion, depreciation and accretion		81,616			66,456
General and administrative (note 7)		20,262			16,296
Interest on bank debt		12,995			9,344
Interest and accretion on convertible debentures		3,660			3,771
Foreign exchange (gain) loss and other		(1,271	)		208
		703,592			517,496
(Loss) income from continuing operations before taxes		(1,377	)		41,311
Capital tax expense		482			258
Current and withholding tax expense		5,035			4,558
Future income tax recovery		(32,001	)		(10,833	)
		(26,484	)		(6,017	)
Net income for the period from continuing operations		25,107			47,328
Income (loss) from discontinued operations (note 10)		8,509			(4,235	)
Net income for the period		33,616			43,093
Accumulated income, beginning of period	$	268,642		$	238,208
Accumulated income, end of period	$	302,258		$	281,301
Net income from continuing operations per unit – basic and diluted	$	0.10		$	0.22
Net income per unit – basic and diluted	$	0.13		$	0.20
The accompanying notes are an integral part of these statements.

Provident Energy 2008 First Quarter Results

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PROVIDENT ENERGY TRUST
CONSOLIDATED STATEMENT OF CASH FLOWS
Canadian dollars (000s)
(unaudited)
	Three months ended
	March 31,
	2008			2007
				(restated - note 3)
Cash provided by operating activities
Net income for the period from continuing operations	$	25,107		$	47,328
Add (deduct) non-cash items:
Depletion, depreciation and accretion		81,616			66,456
Non-cash interest expense and other		884			732
Non-cash unit based compensation (note 7)		(3,173	)		2,495
Unrealized loss (gain) on financial derivative instruments		62,273			(20,867	)
Unrealized foreign exchange (gain) loss and other		(4,312	)		503
Future income tax recovery		(32,001	)		(10,833	)
Funds flow from continuing operations		130,394			85,814
Funds flow from discontinued operations		49,836			1,226
Funds flow from operations		180,230			87,040
Site restoration expenditures		(1,537	)		(1,226	)
Change in non-cash operating working capital from continuing operations		72,734			59,039
Change in non-cash operating working capital from discontinued operations		49,426			5,718
		300,853			150,571
Cash (used for) provided by financing activities
Decrease in long-term debt		(34,565	)		(57,502	)
Declared distributions to unitholders		(91,117	)		(76,271	)
Issue of trust units, net of issue costs		14,197			15,593
Change in non-cash financing working capital		714			504
Financing activities from discontinued operations		(63,155	)		47,563
		(173,926	)		(70,113	)
Cash used for investing activities
Capital expenditures		(84,582	)		(38,753	)
Oil and gas property acquisitions, net		(9,019	)		(8,681	)
Increase in investments		(1,007	)		-
Proceeds on sale of assets		-			7,624
Change in non-cash investing working capital		3,806			1,123
Investing activities from discontinued operations		(28,727	)		(49,610	)
		(119,529	)		(88,297	)
Increase (decrease) in cash and cash equivalents		7,398			(7,839	)
Cash and cash equivalents, beginning of period		6,820			10,302
Cash and cash equivalents, end of period	$	14,218		$	2,463
Cash and cash equivalents, end of period from discontinued operations	$	14,200		$	2,413
Cash and cash equivalents, end of period from continuing operations	$	18		$	50
Supplemental disclosure of cash flow information
Cash interest paid including debenture interest	$	22,079		$	13,405
Cash taxes paid	$	2,100		$	7,787
The accompanying notes are an integral part of these statements.

Provident Energy 2008 First Quarter Results

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PROVIDENT ENERGY TRUST
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AND
ACCUMULATED OTHER COMPREHENSIVE INCOME
Canadian Dollars (000s)
(unaudited)
	Three months ended
	March 31,
	2008			2007
				(restated - note 3)
Net income	$	33,616		$	43,093
Other comprehensive income (loss), net of taxes
Foreign currency translation adjustments		12,536			(3,639	)
Unrealized loss on available-for-sale investments
(net of taxes of $9 in 2008 and $134 in 2007)		(66	)		(789	)
		12,470			(4,428	)
Comprehensive income	$	46,086		$	38,665
Accumulated other comprehensive (loss) income, beginning of period		(69,188	)		(42,294	)
Other comprehensive income (loss)		12,470			(4,428	)
Accumulated other comprehensive (loss) income, end of period	$	(56,718	)	$	(46,722	)
Accumulated income, end of period		302,258			281,301
Accumulated cash disributions, end of period		(1,351,294	)		(1,003,096	)
Retained earnings (deficit), end of period		(1,049,036	)		(721,795	)
Total retained earnings (deficit) and accumulated other comprehensive (loss)
income, end of period	$	(1,105,754	)	$	(768,517	)
The accompanying notes are an integral part of these statements.

Provident Energy 2008 First Quarter Results

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in Cdn$000’s, except unit and per unit amounts) (unaudited)

March 31, 2008

The Interim Consolidated Financial Statements of Provident Energy Trust (“the Trust”) have been prepared by management in accordance with accounting principles generally accepted in Canada. Certain information and disclosures normally required in the notes to the annual financial statements have been condensed or omitted. The Interim Consolidated Financial Statements should be read in conjunction with the Trust’s audited Financial Statements and notes for the year ended December 31, 2007.

1.   Significant accounting policies

The Interim Consolidated Financial Statements have been prepared based on the consistent application of the accounting policies and procedures as set out in the Consolidated Financial Statements of the Trust for the year ended December 31, 2007 and are consistent with policies adopted in the first quarter of 2007, except as described in note 2. Certain comparative numbers have been reclassified to conform with the current period’s presentation. In particular, the comparative figures have been reclassified to reflect discontinued operations presentation for the United States oil and natural gas production (USOGP) business (see note 10).

2.   Changes in accounting policies and practices

(i)   Inventory

In the first quarter of 2008, the Trust adopted the new accounting standard, CICA Handbook Section 3031 - Inventories, which replaced the previous standard for inventories, Section 3030. The main features of the new Section are as follows:

•   measurement of inventories at the lower of cost and net realizable value;

•   consistent use of either first-in, first-out or a weighted average cost formula to measure cost;

•   reversal of previous write-downs to net realizable value when there is a subsequent increase to the value of inventories.

Adoption of the new Section has not had a material impact on the consolidated financial statements.

(ii)   Capital disclosures

In the first quarter of 2008, the Trust adopted CICA Handbook Section 1535 “Capital Disclosures” which addresses the requirements for an entity to disclose qualitative information about its objectives, policies and processes for managing capital. This section also establishes the requirement for an entity to disclose quantitative data about what it regards as capital as well as disclose whether it has complied with any externally imposed capital requirements and, if not, the consequences of such non-compliance. The new disclosure is included in note 9.

(iii)   Financial instruments – disclosures

In the first quarter of 2008, the Trust adopted CICA Handbook Section 3862 “Financial Instruments- Disclosures” and Section 3863 “Financial Instruments-Presentation”. Section 3862 requires entities to provide disclosures in their financial statements that enable users to evaluate the significance of financial instruments to the entity’s financial position and performance. It also requires that entities disclose the nature and extent of risks arising from financial instruments and how the entity manages those risks. Section 3863 establishes presentation guidelines for financial instruments and non-financial derivatives and addresses the classification of financial instruments, from the perspective of the issuer, between liabilities  and equity, the classification of related interest, dividends, losses and gains, and circumstances in which financial assets and financial liabilities are offset. The new disclosure is included in note 8.

Provident Energy 2008 First Quarter Results

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3.Restatement of 2007 interim consolidated financial statements

As previously disclosed in the third quarter of 2007, the Trust determined that an adjustment was necessary principally due to commercial transactions within the Midstream segment that resulted in overstated inventory balances. Internal accounting controls had identified the issue. Related cash settlements with third parties were not affected.

The effect of the restatement on the interim consolidated financial statements for the first quarter of 2007 is summarized below. There was no effect on 2006 or prior periods.

	Effect on the three
	months ended
(000's except per unit amounts)	March 31, 2007
Increase in accounts receivable	$	3,138
(Decrease) in petroleum product inventory		(13,226	)
Decrease in future income tax liability		2,875
(Decrease) in unitholders' equity	$	(7,213	)
(Increase) in cost of goods sold	$	(10,088	)
Decrease in future income tax expense		2,875
(Decrease) in net income	$	(7,213	)
(Decrease) in net income per unit - basic and diluted	$	(0.04	)

4 . Long-term debt

	March 31, 2008			December 31, 2007
Revolving term credit facilities	$	889,867		$	923,996
Convertible debentures		276,942			275,638
Current portion of convertible debentures		(19,382	)		(19,198	)
		257,560			256,440
Total	$	1,147,427		$	1,180,436

(i)   Revolving term credit facility

At March 31, 2008 the Trust had a $1,125 million term credit facility (December 31, 2007 - $1,125 million). At March 31, 2008, $890.7 million was drawn on the facility. Included in the carrying value at March 31, 2008 were financing costs of $0.8 million.

At March 31, 2008 the Trust had letters of credit guaranteeing Provident’s performance under certain commercial and other contracts that totaled $29.7 million. The guarantees totaled $31.6 million at December 31, 2007.

(ii)   Convertible debentures

The Trust may elect to satisfy interest and principal obligations by the issue of trust units. For the three months ended March 31, 2008, $25 thousand of the face value of debentures were converted to trust units at the election of debenture holders (2007 - $0.2 million). Included in the carrying value at March 31, 2008 were financing costs of $6.4 million. The fair value of the convertible debentures at March 31, 2008 approximates the face value of the instruments. The following table details each convertible debenture:

Provident Energy 2008 First Quarter Results

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	As at				As at
Convertible Debentures	March 31, 2008				December 31, 2007
										Conversion
	Carrying				Carrying		Face			Price per
($000s except conversion pricing)	Value(1 )		Face Value		Value(1 )		Value		Maturity Date	unit(2 )
6.5% Convertible Debentures	$	141,189	$	149,980	$	140,515	$	149,980	April 30, 2011		14.75
6.5% Convertible Debentures		91,805		98,999		91,460		99,024	Aug. 31, 2012		13.75
8.0% Convertible Debentures		24,566		25,109		24,465		25,109	July 31, 2009		12.00
8.75% Convertible Debentures		19,382		19,931		19,198		19,931	Dec. 31, 2008		11.05
	$	276,942	$	294,019	$	275,638	$	294,044

(1)  Excluding equity component of convertible debentures

(2)  The debentures may be converted into trust units at the option of the holder of the debenture at the conversion price per unit

5.Asset retirement obligation

The Trust’s asset retirement obligation is based on the Trust’s net ownership in wells, facilities and the midstream assets and represents management’s estimate of the costs to abandon and reclaim those wells, facilities and midstream assets as well as an estimate of the future timing of the costs to be incurred. Estimated cash flows have been discounted at the Trust’s credit-adjusted risk free rate of seven percent and an inflation rate of two percent.

	Three months ended March 31,
($000s)	2008			2007
Carrying amount, beginning of period	$	43,886		$	33,246
Increase in liabilities incurred during the period		686			559
Settlement of liabilities during the period		(1,537	)		(1,226	)
Accretion of liability		1,077			815
Carrying amount, end of period	$	44,112		$	33,394

6.Unitholders’ contributions

The Trust has authorized capital of an unlimited number of common voting trust units.

			Three months ended March 31,
	2008					2007
			Amount					Amount
Trust Units	Number of units			(000s	)	Number of units			(000s	)
Balance at beginning of period		252,634,773	$	2,750,374			211,228,407	$	2,254,048
Issued pursuant to unit option plan		1,000		7			490,210		5,173
Issued pursuant to the distribution reinvestment plan		994,591		9,671			646,840		7,285
To be issued pursuant to the distribution reinvestment plan		448,725		4,519			270,378		3,472
Debenture conversions		1,818		26			21,989		250
Balance at end of period		254,080,907	$	2,764,597			212,657,824	$	2,270,228

The per trust unit amounts for the quarter ended March 31, 2008 were calculated based on the weighted average number of units outstanding of 252,919,221 (2007 – 211,731,407). The diluted per trust unit amounts for 2008 are calculated including an additional 4,294 trust units (2007 – 237,253) for the dilutive effect of the unit option plan and convertible debentures.

7.  Unit based compensation

(i)   Restricted/Performance units

As of March 31, 2008 there were 1,034,651 RTUs and 3,100,636 PTUs outstanding (December 31, 2007 – 849,672 RTUs and 2,478,037 PTUs). The fair value estimate associated with the RTUs and PTUs is

Provident Energy 2008 First Quarter Results

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expensed in the statement of operations over the vesting period.  At March 31, 2008, $16.2 million (December 31, 2007 - $9.9 million) is included in accounts payable and accrued liabilities for this plan and $2.6 million (December 31, 2007 - $12.4 million) is included in other long-term liabilities. The following table reconciles the expense recorded for RTUs and PTUs.

	Three months ended March 31,
	2008			2007
Cash general and administrative	$	8,287		$	1,767
Non-cash unit based compensation (included in general and
administrative)		(3,173	)		2,458
Production, operating and maintenance expense		231			175
	$	5,345		$	4,400

(ii) Unit option plan

At March 31, 2008, the Trust had 1,247,170 options outstanding (March 31, 2007 – 1,615,865) with strike prices ranging from $10.49 to $12.14 per unit (March 31, 2007 - $10.49 and $12.14 per unit). The weighted average remaining contractual life of the options was 0.63 years (March 31, 2007 – 1.42 years) and the weighted average exercise price was $11.05 per unit (March 31, 2007 - $11.04 per unit) excluding average potential reductions to the strike prices of $1.90 per unit (March 31, 2007 - $1.48 per unit). Of these outstanding options, 1,247,170 (March 31, 2007 – 1,551,205) were exercisable with a weighted average price of $11.05 per unit (March 31, 2007 - $11.04).

The following table reconciles the movement in the contributed surplus balance.

	Three months ended March 31,
	2008		2007
Contributed surplus, beginning of the period	$	801	$	1,315
Non-cash unit based compensation (included in general and
administrative)		-		37
Benefit on options exercised charged to unitholders’ equity		-		(337	)
Contributed surplus, end of period	$	801	$	1,015

8.Financial instruments

Risk Management overview

Provident has a comprehensive Enterprise Risk Management program that is designed to identify and manage risks that could negatively affect its business, operations or results. The program’s activities include risk identification, assessment, response, control, monitoring and communication.

Provident’s Risk Management group executes the program with oversight from the Risk Management Committee (“RMC”), which provides regular reports to the Audit Committee and Board of Directors.

Provident has established and implemented Risk Management strategies, policies and limits that are monitored by Provident’s Risk Management group. The derivative instruments the Trust uses include put and call options, costless collars, participating swaps, and fixed price products that settle against indexed referenced pricing. Put option contracts effectively create a floor price for the commodity while allowing for full participation if prices increase. Call options are contracts that allow for a commodity to be sold at a fixed price at the option of the contract holder. Costless collars are contracts entered into that provide a floor and a ceiling price to limit the risk if prices fall and allowing upward participation within a set range. Participating swaps are contracts entered into that provide a floor and also provide a ceiling for a certain percentage of the volume of the contract. This type of derivative allows for price protection if the price falls, while still allowing some participation if the price increases. Fixed price swaps are contracts that specify a fixed price at which a certain volume of product will be bought or sold at in the future.

Provident Energy 2008 First Quarter Results

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The Risk Management group monitors risk exposure by generating and reviewing mark-to-market reports and counterparty credit exposure of Provident’s outstanding derivative contracts. Additional monitoring activities include reviewing available derivative positions, regulatory changes and bank and analyst reports.

Provident’s commodity price risk management program includes a consistent, active and disciplined program that utilizes derivative instruments to provide for insurance against lower commodity prices and product margins, as well as fluctuating interest and foreign exchange rates. The program is designed to stabilize cash flows in order to support cash distributions, capital programs and bank financing.  The risk management strategy protects a percentage of Provident’s oil and natural gas production against a decline in commodity prices. Provident seeks to use products that allow participation in a rising commodity price environment where possible and economic. The program provides price stabilization and protection of a percentage of inventory values and fractionation spread margin associated with the midstream business unit. As well, the Provident risk management strategy reduces foreign exchange risk due to the exposure arising from the conversion of U.S. dollars into Canadian dollars.

Fair Values

The fair values of financial instruments are determined by reference to independent monthly forward settlement prices, interest rate yield curves, currency rates, and volatility rates at the period-end dates. All of Provident’s financial instruments are executed in liquid markets.

											Total
	Held for		Held to		Available		Loans and		Other		Carrying
As at March 31, 2008	Trading		Maturity		for sale		Receivables		liabilities		Value
Assets
Cash and cash equivalents	$	18	$	-	$	-	$	-	$	-	$	18
Accounts receivable		-		-		-		323,658		-		323,658
Financial derivative instruments - current asset		3,683		-		-		-		-		3,683
Investments		-		4,622		2,172		-		-		6,794
	$	3,701	$	4,622	$	2,172	$	323,658	$	-	$	334,153
Liabilities
Accounts payable and accrued liabilities	$	-	$	-	$	-	$	-	$	384,324	$	384,324
Cash distributions payable		-		-		-		-		25,814		25,814
Current portion of convertible debentures		-		-		-		-		19,382		19,382
Financial derivative instruments- current liabilities		116,543		-		-		-		-		116,543
Long-term debt - revolving term credit facilities		-				-		-		889,867		889,867
Long-term debt - convertible debentures		-		-		-		-		257,560		257,560
Financial derivative instruments - long -term liabilities		223,922		-		-		-		-		223,922
Other long-term liabilities		-		-		-		-		2,610		2,610
	$	340,465	$	-	$	-	$	-	$	1,579,557	$	1,920,022

Except as disclosed in note 4 in connection with the convertible debentures, there were no significant differences between the carrying value of these financial instruments and their estimated fair value as at March 31, 2008.

The following table is a summary of the net financial derivative instruments liability:

	As at		As at
	March 31,		December 31,
($000s)	2008		2007
Commodity prices
Crude Oil	$	21,648	$	19,215
Natural Gas		5,150		(5,901	)
Midstream		309,620		261,587
Other		364		245
Total	$	336,782	$	275,146

Provident Energy 2008 First Quarter Results

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Market Risk

Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices. Market risk generally comprises of price risk, currency risk and interest rate risk.

a)Price risk

Commodity Price Risk Management Program

The decisions to enter into financial derivative positions and to execute risk management strategy are made by senior officers of Provident who are also members of the RMC. The RMC receives input and commodity expertise from each business unit in the decision making process. Strategies are selected based on their ability to help Provident provide stable cash flow and distributions per unit rather than to simply lock in a specific price per barrel of oil or cubic foot of natural gas.

Oil and Natural Gas

Provident’s risk management program employs derivative instruments, such as puts, participating swaps and costless collars, to protect a floor level of Provident’s revenue on a portion of the oil and gas sold. At the same time, these instruments enable Provident to retain various levels of participation to the extent oil and gas prices rise. Provident may also use fixed price derivative instruments for its oil and natural gas business lines to protect acquisition economics.

The major identified risks for the oil and natural gas business line are commodity price volatility and market location and product quality differentials. Provident addresses these risks using a risk management program designed to protect a portion of its cash flow in order to support continued unitholder distributions, capital programs and bank financing.

Midstream

Commodity price volatility and market location differentials also affect the Midstream business. In addition, Midstream is exposed to possible price declines between the time Provident purchases natural gas liquid (NGL) feedstock and sells NGL products, and to narrowing frac spreads. Frac spread is the margin between the price paid for the natural gas feedstock from which Provident extracts NGLs, and the absolute price at which Provident sells NGL products (propane, butane and condensate).

Provident responds to these risks using a risk management program that protects a margin or floor level of operating income on a portion of its NGL inventory and production, while retaining some ability to participate in a widening margin environment. For the longer-term, Provident uses crude oil contracts in place of NGLs. Provident may replace these positions with actual NGL positions as market conditions allow. This strategy enables Provident to mitigate commodity price risk related to its NGL production business up to approximately five years into the future.

b)Currency risk

Provident receives both Canadian and U.S. dollars for oil, natural gas and NGL sales, exposing it to both positive and negative effects of fluctuations in the exchange rate.  Provident manages this exposure by matching a significant portion of the cash costs that it expects with revenues in the same currency. As well, Provident uses derivative instruments to manage the U.S. cash requirements of its U.S. and Canadian business lines.

Provident regularly sells or purchases forward a portion of expected U.S. cashflows. Provident’s strategy also manages the exposure it has to fluctuations in the U.S./Canadian dollar exchange rate when the underlying commodity price is based upon a U.S. index price. Provident may also use derivative products that provide for insurance against a stronger Canadian dollar, while allowing it to participate if the currency weakens relative to the U.S. dollar.

Provident Energy 2008 First Quarter Results

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c)Interest rate risk

The Trust’s revolving term credit facilities bear interest at a floating rate. Using debt levels as at March 31, 2008, an increase/decrease of 50 basis points in the lender’s base rate would result in an increase/decrease of annual interest expense of approximately $4.5 million.

Financial derivative sensitivity analysis

The following table shows the impact on unrealized (loss) gain on financial derivative instruments if the underlying risk variables of the financial derivative instruments changed by a specified amount, with other variables held constant.

(000's)		+ Change			- Change
COGP
Crude Oil	(WTI +/- $10.00 per bbl)	$	(6,802	)	$	6,967
Natural Gas	(Aeco +/- $1.00 per gj)		(3,807	)		4,466
Midstream
Crude Oil	(WTI +/- $10.00 per bbl)		(153,538	)		152,606
Natural Gas	(Aeco +/- $1.00 per gj)		84,448			(83,922	)
NGL's	(Belvieu +/- $0.15 per gal)		3,211			(3,120	)
Foreign Exchange ($U.S. vs $Cdn)	(FX rate +/- $ 0.01)		(2,796	)		2,834

Liquidity Risk

Liquidity risk is the risk the Trust will not be able to meet its financial obligations as they fall due. The Trust’s approach to managing liquidity risk is to ensure that it always has sufficient cash and credit facilities to meet its obligations when due, without incurring unacceptable losses or damage to the Trust’s reputation.

Management typically forecasts cash flows for a period of twelve months to identify financing requirements. These requirements are then addressed through a combination of committed and demand credit facilities and access to capital markets, as discussed in note 9.

The following table outlines the timing of the cash outflows relating to financial liabilities.

As at March 31, 2008			Payment due by period
			Less than 1
($000s)	Total		year		1 to 3 years		4 to 5 years
Accounts payable and accrued liabilities	$	384,324	$	384,324	$	-	$	-
Cash distributions payable		25,814		25,814		-		-
Current portion of convertible debentures		19,382		19,382		-		-
Financial derivative instruments - current		116,543		116,543		-		-
Long-term debt - revolving term credit facilities (1)		889,867		-		889,867		-
Long-term debt - convertible debentures		257,560		-		24,566		232,994
Long-term financial derivative instruments		223,922		-		157,308		66,614
Other long-term liabilities		2,610		-		2,610		-
Total	$	1,920,022	$	546,063	$	1,074,351	$	299,608

(1) The terms of the Canadian credit facility have a revolving three year period expiring on May 30, 2010. Provident can extend the revolving period by an additional year, no earlier than 90 days and no later than 30 days prior to the end of the first year of the applicable three year revolving period. If the lenders do not extend the revolving period, or Provident chooses not to extend, the credit facility will be terminated and the loan balance will become due and payable in full on the maturity date. Management intends to extend the revolving period beyond the current maturity date.

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Credit Risk

Provident's Credit Policy governs the activities undertaken to mitigate the risks associated with counterparty (customer) non-payment.  The Policy requires a formal credit review for counterparties entering into a commodity contract with Provident. This review determines an approved credit limit. Activities undertaken include regular monitoring of counterparty exposures, an annual review of all active counterparties, utilizing master netting arrangements and obtaining financial assurances where warranted. Financial assurances include guarantees, letters of credit and cash. In addition, the policy sets criteria to ensure that Provident has a diversified base of creditors.

Substantially all of the Trust's accounts receivable are due from customers and joint venture partners in the oil and gas and midstream services and marketing industries and are subject to credit risk. The Trust partially mitigates associated credit risk by limiting transactions with certain counterparties to limits imposed by the Trust based on the Trust’s assessment of the creditworthiness of such counterparties. The carrying value of accounts receivable reflects management's assessment of the associated credit risks. With respect to counterparties to financial instruments, the Trust partially mitigates associated credit risk by limiting transactions to counterparties with investment grade credit ratings.

9.Capital management

Provident considers its total capital to be comprised of net debt and Unitholders’ Equity. Net debt is comprised of long-term debt and working capital deficit (surplus), excluding balances for the current portion of financial derivative instruments. The balance of these items at March 31, 2008 and December 31, 2007 was as follows:

	As at			As at
	March 31,			December 31,
($000s)	2008			2007
Working capital deficit (surplus) (1)	$	23,299		$	(58,732	)
Long-term debt (including current portion)		1,166,809			1,199,634
Net debt		1,190,108			1,140,902
Unitholders' equity		1,677,855			1,708,665
Total capitalization	$	2,867,963		$	2,849,567
Net debt to total capitalization (%)		41	%		40	%
(1) The working capital deficit (surplus) excludes balances for the current portion of financial derivative instruments.

The Trust monitors its debt to total capitalization ratio as it must be less than 55 percent according to certain financial covenants. The Trust’s debt to total capitalization ratio remains within stated guidelines.

Provident’s primary objective for managing capital is to maximize long-term Unitholder value by:

● providing an appropriate return to shareholders relative to the risk of Provident’s underlying assets; and

● ensuring financing capacity for Provident’s acquisitions of energy related assets that are expected to add value to our Unitholders.

Provident makes adjustments to its capital structure based on economic conditions and the Company’s planned requirements. Provident has the ability to adjust its capital structure by issuing new equity or debt, controlling the amount it returns to unitholders, and making adjustments to its capital expenditure program.  Provident relies on cash flow from operations, external lines of credit and access to equity markets to fund capital programs and acquisitions.

The Trust is subject to certain capital growth restrictions as a result of the Canadian trust tax legislation passed in June 2007 and effective January 1, 2011. The restrictions provide that “normal growth” would include equity growth within certain “safe harbour” limits, measured by reference to the Trust’s market capitalization as of the end of trading on October 31, 2006. These rules limit the amount of Unitholders’ capital that can be issued by the Trust in each of the next three years, as follows:

Provident Energy 2008 First Quarter Results

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($ billions)	Annual		Cumulative
Normal growth capital allowed in:
2008(1)		0.6		1.7
2009		0.6		2.3
2010		0.5		2.8
(1) The Trust's allowed growth capital prior to 2008 was approximately $1.1 billion.

If the maximum equity growth allowed is exceeded, the Trust may be subject to trust taxation prior to 2011. In 2007, the Trust issued equity amounting to $496.3 million.

10.Discontinued operations (USOGP)

In February, 2008 the Trust announced a strategic process respecting the decision to dispose of the operations that comprise the United States oil and natural gas production (USOGP) business. Effective in the first quarter of 2008, Provident’s USOGP business is accounted for as discontinued operations and comparative figures have been reclassified to conform with this presentation.

The following tables show the net assets of discontinued operations and information about net income (loss) from UGOSP.

	As at			As at
Balance sheets	March 31,			December 31,
Canadian dollars (000s)	2008			2007
Assets
Current assets	$	101,066		$	93,578
Property, plant and equipment		2,115,331			2,008,549
Other long-term assets		22,484			19,055
		2,137,815			2,027,604
	$	2,238,881		$	2,121,182
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	119,473		$	77,244
Financial derivative instruments		84,053			37,437
		203,526			114,681
Long-term debt - revolving term credit facilities		344,866			368,836
Long-term financial derivative instruments		96,495			66,382
Asset retirement obligation and other long-term liabilities		42,026			45,373
Future income taxes		143,917			147,911
		627,304			628,502
Non-controlling interests		1,107,665			1,100,136
Net Assets - discontinued operations	$	300,386		$	277,863
Net income (loss) from discontinued operations	Three months ended March 31,
Canadian dollars (000's)	2008			2007
Revenue	$	137,406		$	37,680
Loss from discontinued operations before taxes and non-controlling
interests		(14,446	)		(11,839	)
Income tax recovery		(9,806	)		(4,108	)
Non-controlling interests		(13,149	)		(3,496	)
Net income (loss) from discontinued operations for the period	$	8,509			(4,235	)

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11.Segmented information

The Trust’s business activities are conducted through two business segments: Canadian oil and natural gas production and Midstream.

Oil and natural gas production includes exploitation, development and production of crude oil and natural gas reserves.  Midstream includes fractionation, transportation, loading and storage of natural gas liquids, and marketing of crude oil and natural gas liquids.

Geographically the Trust operates in Canada in the oil and gas production business segment and in Canada and the USA in the Midstream business.

Provident Energy 2008 First Quarter Results

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	Three months ended March 31, 2008
	Canadian Oil
	and Natural
	Gas Production			Midstream (1)			Total
Revenue
Gross production revenue	$	154,386		$	-		$	154,386
Royalties		(28,597	)		-			(28,597	)
Product sales and service revenue		-			669,636			669,636
Realized loss on financial derivative instruments		(2,974	)		(27,963	)		(30,937	)
		122,815			641,673			764,488
Expenses
Cost of goods sold		-			544,077			544,077
Production, operating and maintenance		30,376			3,350			33,726
Transportation		3,644			4,883			8,527
Foreign exchange (gain) loss and other		1,524			1,517			3,041
General and administrative		11,923			11,859			23,782
		47,467			565,686			613,153
Earnings before interest, taxes, depletion, depreciation,
accretion and other non-cash items		75,348			75,987			151,335
Other revenue
Unrealized (loss) gain on financial derivative
instruments		(14,368	)		(47,905	)		(62,273	)
Other expenses
Depletion, depreciation and accretion		72,502			9,114			81,616
Interest on bank debt		3,249			9,746			12,995
Interest and accretion on convertible debentures		915			2,745			3,660
Unrealized foreign exchange loss (gain) and other		1			(4,313	)		(4,312	)
Non-cash unit based compensation		(1,745	)		(1,428	)		(3,173	)
Internal management charge		(347	)		-			(347	)
Capital tax expense		482			-			482
Current and withholding tax (recovery) expense		(113	)		5,148			5,035
Future income tax (recovery) expense		(23,555	)		(8,446	)		(32,001	)
		51,389			12,566			63,955
Net (loss) income for the period from continuing
operations	$	9,591		$	15,516		$	25,107
Income (loss) from discontinued operations (note 10)								8,509
Net income for the period							$	33,616

(1) Included in the Midstream segment is product sales and service revenue of $120.6 million associated with U.S. operations.

Provident Energy 2008 First Quarter Results

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	As at and for the three months ended March 31, 2008
	Canadian Oil
	and Natural
	Gas Production		Midstream		Total
Selected balance sheet items
Capital assets
Property, plant and equipment net	$	1,794,069	$	736,797	$	2,530,866
Intangible assets		-		168,428		168,428
Goodwill		416,890		100,409		517,299
Capital expenditures
Capital Expenditures		79,158		5,424		84,582
Oil and gas property acquisitions, net		9,019		-		9,019
Working capital
Accounts receivable		101,270		222,388		323,658
Petroleum product inventory		-		58,983		58,983
Accounts payable and accrued liabilities		156,270		228,054		384,324
Long-term debt - revolving term credit facilities		222,467		667,400		889,867
Long-term debt - convertible debentures		64,390		193,170		257,560
Financial derivative instruments	$	27,162	$	309,620	$	336,782

Provident Energy 2008 First Quarter Results

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	Three months ended March 31, 2007
	Canadian Oil
	and Natural
	Gas Production			Midstream (1) (2)			Total
Revenue
Gross production revenue	$	105,198		$	-		$	105,198
Royalties		(19,685	)		-			(19,685	)
Product sales and service revenue		-			455,361			455,361
Realized loss on financial derivative instruments		(845	)		(2,089	)		(2,934	)
		84,668			453,272			537,940
Expenses
Cost of goods sold		-			385,089			385,089
Production, operating and maintenance		26,261			3,422			29,683
Transportation		1,709			4,940			6,649
Foreign exchange (gain) loss and other		(295	)		-			(295	)
General and administrative		7,237			6,968			14,205
		34,912			400,419			435,331
Earnings before interest, taxes, depletion, depreciation,
accretion and other non-cash items		49,756			52,853			102,609
Other revenue
Unrealized (loss) gain on financial derivative
instruments		(15,051	)		35,918			20,867
Other expenses
Depletion, depreciation and accretion		55,298			11,158			66,456
Interest on bank debt		2,336			7,008			9,344
Interest and accretion on convertible debentures		943			2,828			3,771
Unrealized foreign exchange loss (gain) and other		-			503			503
Non-cash unit based compensation		986			1,509			2,495
Internal management charge		(404	)		-			(404	)
Capital tax expense		258			-			258
Current and withholding tax (recovery) expense		35			4,523			4,558
Future income tax (recovery) expense		(20,237	)		9,404			(10,833	)
		39,215			36,933			76,148
Net (loss) income for the period from continuing
operations	$	(4,510	)	$	51,838		$	47,328
Income (loss) from discontinued operations (note 10)								(4,235	)
Net income for the period							$	43,093

(1)  Included in the Midstream segment is product sales and service revenue of $91.2 million associated with U.S. operations.

(2)  Restated - see note 3.

Provident Energy 2008 First Quarter Results

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	As at and for the three months ended March 31, 2007
	Canadian Oil
	and Natural
	Gas Production		Midstream (1)		Total
Selected balance sheet items
Capital assets
Property, plant and equipment net	$	1,204,537	$	729,130	$	1,933,667
Intangible assets		-		188,028		188,028
Goodwill		330,944		100,409		431,353
Capital expenditures
Capital Expenditures		38,388		365		38,753
Oil and gas property acquisitions, net		8,681		-		8,681
Working capital
Accounts receivable		73,792		182,153		255,945
Petroleum product inventory		-		61,008		61,008
Accounts payable and accrued liabilities		110,890		179,352		290,242
Long-term debt - revolving term credit facilities		157,099		471,296		628,395
Long-term debt - convertible debentures		69,386		208,158		277,544
Financial derivative instruments	$	5,192	$	32,877	$	38,069
(1) Restated - see note 3.

Provident Energy 2008 First Quarter Results

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