True Energy Trust announces first quarter 2009 financial results



    TSX: TUI.UN

    CALGARY, May 7 /CNW/ - (TSX: TUI.UN) True Energy Trust ("True," "Company"
or the "Trust") announces its financial and operating results for the three
months ended March 31, 2009.

    
                                 HIGHLIGHTS

    -------------------------------------------------------------------------
                                                 Three months ended March 31,
                                                            2009        2008
    -------------------------------------------------------------------------
    FINANCIAL (unaudited)
    (CDN$000s except unit and per unit amounts)
    Revenue (before royalties and hedging(1))             31,345      70,033
    Funds flow from operations(2)                          6,489      24,233
      Per basic trust unit                                 $0.08       $0.31
      Per diluted trust unit(5)                            $0.08       $0.30
    Net loss                                              (9,056)    (18,621)
      Per basic trust unit                                $(0.12)     $(0.24)
      Per diluted trust unit(5)                           $(0.12)     $(0.24)
    Distributions declared                                 1,570       9,507
      Per unit                                             $0.02       $0.12
    -------------------------------------------------------------------------
    Exploration and development                            2,528       8,453
    Corporate and property acquisitions                      228         197
    -------------------------------------------------------------------------
    Capital expenditures - cash                            2,756       8,650
    Property dispositions - cash                               8      (5,788)
    Other - non-cash                                        (114)       (193)
    -------------------------------------------------------------------------
    Total capital expenditures - net                       2,650       2,669
    -------------------------------------------------------------------------
    Long-term debt                                       131,622     171,850
    Convertible debentures(3)                             81,598      79,837
    Working capital deficiency (excess)                      709     (12,219)
    -------------------------------------------------------------------------
    Total net debt(3)                                    213,929     239,468
    -------------------------------------------------------------------------
    Total assets                                         718,713     861,569
    Unitholders' equity                                  395,376     435,232
    -------------------------------------------------------------------------
    OPERATING
    Daily sales volumes
      Crude oil, condensate and NGLs         (bbls/d)      3,826       4,843
      Natural gas                             (mcf/d)     36,928      52,252
      Total oil equivalent                    (boe/d)      9,981      13,552
    Average prices
      Crude oil, condensate and NGLs          ($/bbl)      36.71       71.59
      Crude oil, condensate and NGLs
       (including hedging(1))                 ($/bbl)      36.71       61.98
      Natural gas                             ($/mcf)       5.41        7.97
      Natural gas (including hedging(1))      ($/mcf)       6.21        7.99
      Total oil equivalent                    ($/boe)      34.10       56.31
      Total oil equivalent (including
       hedging(1))                            ($/boe)      37.03       52.96
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                 Three months ended March 31,
                                                            2009        2008
    -------------------------------------------------------------------------
    Statistics
      Operating netback(4)                    ($/boe)       9.81       29.28
      Operating netback(4) (including
       hedging(1))                            ($/boe)      12.74       25.92
      Transportation                          ($/boe)       1.74        0.68
      Production expenses                     ($/boe)      15.53       13.78
      General & administrative                ($/boe)       3.16        3.06
      Royalties as a % of sales after
       transportation                                        22%         23%
    -------------------------------------------------------------------------
    TRUST UNITS
    Trust units outstanding                           78,496,581  79,230,460
    Trust unit incentive rights outstanding            4,118,132   5,232,665
    Units issuable for exchangeable shares               312,467     337,351
    Units issuable for convertible debentures          5,390,625   5,390,625
    -------------------------------------------------------------------------
    Diluted trust units outstanding                   88,317,805  90,191,101
    Diluted weighted average trust units(5)           78,496,581  79,223,088

    -------------------------------------------------------------------------
    TRUST UNIT TRADING STATISTICS

    (CDN$, except volumes) based on intra-day trading
    High                                                    1.56        4.00
    Low                                                     0.48        2.94
    Close                                                   0.68        3.66
    Average daily volume                                 171,103     257,218
    -------------------------------------------------------------------------

    (1) The Trust has entered into various commodity risk management
    contracts which are considered to be economic hedges. Per unit metrics
    after hedging includes only the realized portion of gains or losses on
    commodity contracts.

    The Trust does not apply hedge accounting to these contracts. As such,
    these contracts are revalued to fair value at the end of each reporting
    date. This results in recognition of unrealized gains or losses over the
    term of these contracts which is reflected each reporting period until
    these contracts are settled, at which time realized gains or losses are
    recorded. These unrealized gains or losses on commodity contracts are not
    included for purposes of per unit metrics calculations disclosed.

    (2) The highlights section contains the term "funds flow from operations"
    (or as commonly referred to as "cash flow from operations"), which should
    not be considered an alternative to, or more meaningful than cash flow
    from operating activities as determined in accordance with Canadian
    generally accepted accounting principles ("GAAP") as an indicator of the
    Trust's performance. Therefore reference to diluted funds flow from
    operations or funds flow from operations per trust unit may not be
    comparable with the calculation of similar measures for other entities.
    Management uses funds flow from operations to analyze operating
    performance and leverage and considers funds flow from operations to be a
    key measure as it demonstrates the Trust's ability to generate the cash
    necessary to fund future capital investments and to repay debt. The
    reconciliation between funds flow from operations and cash flow from
    operating activities can be found in the Management Discussion and
    Analysis ("MD&A"). Funds flow from operations per trust unit is
    calculated using the weighted average number of trust units for the
    period.

    (3) Net debt includes the net working capital deficiency (excess) before
    short-term commodity contract assets and liabilities, current portion of
    long-term debt and short-term future income tax assets and liabilities.
    Total net debt also includes the liability component of convertible
    debentures and excludes asset retirement obligations and the future
    income tax liability.

    (4) Operating netbacks are calculated by subtracting royalties,
    transportation, and operating costs from revenues.

    (5) In computing weighted average diluted earnings per trust unit for the
    three month period ended March 31, 2009 a total of 4,118,132 (2008:
    5,232,665) trust incentive units, 312,467 (2008: 337,351) exchangeable
    shares and 5,390,625 (2008: 5,390,625) trust units issuable pursuant to
    the conversion of convertible debentures were excluded from the
    calculation of diluted earnings per trust unit as they were not dilutive.

    To calculate weighted average diluted funds flow from operations for the
    three month period ended March 31, 2009, a total of 312,467 exchangeable
    shares, 4,118,132 (2008: 5,232,665) trust incentive units and 5,390,625
    (2008: 5,390,625) trust units issuable pursuant to the conversion of
    convertible debentures were excluded from the calculation as they were
    not dilutive. To calculate weighted average diluted funds flow from
    operations for the three month period ended March 31, 2008, 337,351
    exchangeable shares were added to the denominator, resulting in diluted
    weighted average trust units of 79,558,882 under this calculation.

                            REPORT TO UNITHOLDERS

    The first quarter of 2009 featured continued erosion of commodity pricing
in lockstep with the entrenching global economic recession. True has undergone
significant corporate restructuring in response to its weak balance sheet and
past mediocre performance. These strategic changes include:

    -   Restructuring True's management team with professionals recognized
        for their technical expertise and successful full cycle exploration
        track records in the Western Canadian Basin. Joining Edward J. Brown,
        Vice President, Finance & CFO and Russell Oicle, Vice President,
        Exploration is Raymond G. Smith, President & CEO, Duncan Chisholm,
        Vice President, Engineering and COO and Ving Woo, Vice President,
        Operations. This new team possess in excess of 175 years of
        operational and management experience.

    -   Maximizing production hedges with 56% of True's natural gas for Q2 -
        Q4 2009 forward sold for an average of $7.08 CAD/mcf and 18% of Q1 -
        Q2 2010 natural gas production hedged at an average of $7.96 CAD/mcf.
        In addition, 500 bbl/d of oil for Q2 - Q4 is hedged by way of a
        costless collar of $52.30 CAD x $80.70 CAD.

    -   Undertaking a field efficiency program to reduce lease operating
        expenses from $66.6 million posted in 2008 to a target of $48.8
        million in 2009. Historically, Q1 lease operating expenses are higher
        than the following quarters due to winter conditions. True's Q1 2009
        lease operating expenses of $14.0 million are in line with the new
        targets and down 18% from $17.0 million in Q1 2008.

    -   Streamlining the internal business units and staff reductions
        position True to make its uncapitalized 2009 G&A target of $11.4
        million, down by 38% from $18.4 million in 2008.

    -   Reducing the capital budget to $15 million in 2009 from $43 million
        in 2008. With cash flows estimated at approximately $30 million,
        distributions and repayment of debt will consume the remaining $15
        million of available cash flow. As we monitor actual cash flows and
        commodity pricing, minimal capital of $3 million to $4 million is
        planned in the first half of 2009 to provide flexibility in the
        second half of 2009. Distributions were also suspended in February to
        conserve capital, resulting in $1.6 million distributed year to date.

    -   Implementing a full scale optimization and maintenance program
        throughout True's operated properties; the Company operates 70% of
        its daily production. The initial results are exceeding expectations
        as the program not only arrested True's production decline in the
        first quarter, but increased overall deliverability without drilling
        or recompleting wells; production during the first week of January
        was 9,800 boe/d, while the Q1 production exit rate was 10,150 boe/d.

    -   Banking lines were reviewed at the end of Q1, resulting in a decrease
        from $152 million to $140 million; a reduction of 7.9%. Net debt,
        excluding the convertible debentures stood at $131.6 million as of
        March 31, 2009. The renewed bank facility will be reviewed again at
        the end of Q2, the debt anniversary date.

    -   Conducting a complete geological and geophysical review on
        approximately 358,000 net undeveloped acres held by True as of March
        31, 2009, resulting in the identification of 300 development well
        locations on existing lease holdings which management estimates, for
        planning purposes, could yield up to an aggregate of 15,000 boe/d of
        production adds on a risked basis. The risks include the ability to
        fund the projects, technical risks associated with conducting the
        operations, and the risks associated with encountering the
        hydrocarbon bearing horizon as projected. This represents a multi-
        year drilling inventory at an estimated cost of approximately $200
        million.

    First quarter results are already evidencing the revitalization and
include:

    Financial

    -   Funds flow from operations for the first quarter of 2009 was $6.5
        million on gross sales of $31.3 million compared to funds flow from
        operations for the fourth quarter of 2008 of $5.9 million on gross
        sales of $41.1 million.

    -   The net loss for the first quarter of 2009 was $9.1 million compared
        to a net loss of $18.6 million for the same period in 2008 and a net
        loss of $9.5 million in the fourth quarter of 2008.

    -   True's total net debt including the liability component of its
        convertible debentures, excluding unrealized commodity contract
        assets and liabilities, future income taxes and asset retirement
        obligations, as at March 31, 2009 was $213.9 million, as compared to
        $215.0 million as at December 31, 2008.

    -   2009 first quarter sales volumes averaged 9,981 boe/d compared to
        10,750 boe/d in the fourth quarter of 2008. True's production and
        operations have been negatively impacted by the extreme weather
        conditions experienced in western Canada in December 2008 and
        extending through February 2009.

    -   True's natural gas price for the first quarter of 2009, after
        including hedging, was $6.21/mcf compared to $7.99/mcf for the same
        period in 2008.

    -   True farmed out 5 gross wells in the Willesden Green area resulting
        in 5 gross natural gas wells with True retaining a 24% average
        working interest with no payout account.

    -   Capital expenditures for the first quarter of 2009 were $2.8 million
        which were funded by available cash flow.
    

    The impact of True's strategic restructuring and reorganization will be
demonstrated in the upcoming months and years. With its reinvigorated
management team, True is embarking on restoring its growth, improving its
balance sheet and re-establishing unitholder value. True is now an exploration
and production oil and gas trust, powered by a diverse asset base, focused on
sustainable growth. In addition, True has a significant multi-year drilling
inventory of locations in Alberta, Saskatchewan and British Columbia.

    
    Raymond G. Smith, P. Eng.
    President and CEO
    May 7, 2009



                    MANAGEMENT'S DISCUSSION AND ANALYSIS
    

    May 7, 2009 - The following Management's Discussion and Analysis of
financial results as provided by the management of True Energy Trust ("True"
or the "Trust") should be read in conjunction with the unaudited interim
consolidated financial statements and selected notes for the three months
ended March 31, 2009 and the audited consolidated financial statements of the
Trust for the years ended December 31, 2008 and 2007 and the related
Management's Discussion and Analysis of financial results. This commentary is
based on information available to, and is dated as of, May 7, 2009. The
financial data presented is in accordance with Canadian generally accepted
accounting principles ("GAAP") in Canadian dollars, except where indicated
otherwise.
    CONVERSION: The term barrels of oil equivalent ("boe") may be misleading,
particularly if used in isolation. A boe conversion ratio of six thousand
cubic feet of natural gas to one barrel of oil equivalent (6 mcf/bbl) is based
on an energy equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead. All boe
conversions in this report are derived from converting gas to oil in the ratio
of six thousand cubic feet of gas to one barrel of oil.
    NON-GAAP MEASURES: This Management's Discussion and Analysis contains the
term "funds flow from operations" (or also commonly referred to as "cash flow
from operations"), which should not be considered an alternative to, or more
meaningful than "cash flow from operating activities" as determined in
accordance with Canadian GAAP as an indicator of the Trust's performance.
Therefore reference to funds flow from operations or funds flow from
operations per unit may not be comparable with the calculation of similar
measures for other entities. Management uses funds flow from operations to
analyze operating performance and leverage and considers funds flow from
operations to be a key measure as it demonstrates the Trust's ability to
generate the cash necessary to fund future capital investments and to repay
debt. The reconciliation between funds flow from operations and cash flow from
operating activities can be found in the Management's Discussion and Analysis.
Funds flow from operations per unit is calculated using the weighted average
number of units for the period.
    This Management's Discussion and Analysis also contains other terms such
as total net debt and operating netbacks, which are not recognized measures
under Canadian GAAP. Total net debt is calculated as long-term debt plus the
liability component of the convertible debentures and the net working capital
deficiency (excess) before short-term commodity contract assets and
liabilities, current portion of long-term debt and short-term future income
tax assets and liabilities. Operating netbacks are calculated by subtracting
royalties, transportation, and operating expenses from revenues. Management
believes these measures are useful supplemental measures of firstly, the total
amount of current and long-term debt and secondly, the amount of revenues
received after transportation, royalties and operating expenses. Readers are
cautioned, however, that these measures should not be construed as an
alternative to other terms such as current and long-term debt or net income
determined in accordance with GAAP as measures of performance. True's method
of calculating these measures may differ from other entities, and accordingly,
may not be comparable to measures used by other trusts or companies.
    Additional information relating to the Trust, including the Trust's
Annual Information Form, is available on SEDAR at www.sedar.com.

    FORWARD LOOKING STATEMENTS: Certain information contained herein may
contain forward looking statements including management's assessment of future
plans and operations, drilling and tie-in plans and the timing thereof, plans
regarding wells to be drilled, expected or anticipated production rates,
hedging strategies, anticipated liquidity of the Trust and various matters
that may impact such liquidity, timing of bringing production back on from
certain wells, planned reductions in operating expenses in 2009 and expected
operating expenses, expected production and transportation expenses and
general and administrative expenses, expected levels of revenues and operating
netbacks in 2009 compared to 2008, proportion of distributions anticipated to
be taxable, maintenance of productive capacity and capital expenditures and
the nature of capital expenditures and the timing and method of financing
thereof, may constitute forward-looking statements under applicable securities
laws and necessarily involve risks including, without limitation, risks
associated with oil and gas exploration, development, exploitation,
production, marketing and transportation, loss of markets, volatility of
commodity prices, currency fluctuations, imprecision of reserve estimates,
environmental risks, competition from other producers, inability to retain
drilling rigs and other services, incorrect assessment of the value of
acquisitions, failure to realize the anticipated benefits of acquisitions,
delays resulting from or inability to obtain required regulatory approvals and
ability to access sufficient capital from internal and external sources. The
recovery and reserve estimates of True's reserves provided herein are
estimates only and there is no guarantee that the estimated reserves will be
recovered. Events or circumstances may cause actual results to differ
materially from those predicted, as a result of the risk factors set out and
other known and unknown risks, uncertainties, and other factors, many of which
are beyond the control of True. In addition, forward-looking statements or
information are based on a number of factors and assumptions which have been
used to develop such statements and information but which may prove to be
incorrect. Included herein is an estimate of True's cash flow from operations
in 2009 and the percentage that 2009 assumed distributions and its planned
capital budget will be of such estimated funds flow from operations. Such
financial outlook was approved by management of the Trust on February 9, 2009
and such financial outlook is included herein to provide an assessment of the
ability of the Trust to generate the cash necessary to fund future capital
investments after assumed distributions and to repay debt. Although the Trust
believes that the expectations reflected in such forward-looking statements or
information are reasonable, undue reliance should not be placed on
forward-looking statements because the Trust can give no assurance that such
expectations will prove to be correct. In addition to other factors and
assumptions which may be identified herein, assumptions have been made
regarding, among other things: the impact of increasing competition; the
general stability of the economic and political environment in which the Trust
operates; the timely receipt of any required regulatory approvals; the ability
of the Trust to obtain qualified staff, equipment and services in a timely and
cost efficient manner; drilling results; the ability of the operator of the
projects which the Trust has an interest in to operate the field in a safe,
efficient and effective manner; the ability of the Trust to obtain financing
on acceptable terms; field production rates and decline rates; the ability to
replace and expand oil and natural gas reserves through acquisition,
development of exploration; the timing and costs of pipeline, storage and
facility construction and expansion and the ability of the Trust to secure
adequate product transportation; future commodity gas prices; currency,
exchange and interest rates; the regulatory framework regarding royalties,
taxes and environmental matters in the jurisdictions in which the Trust
operates; and the ability of the Trust to successfully market its oil and
natural gas products. Readers are cautioned that the foregoing list is not
exhaustive of all factors and assumptions which have been used. As a
consequence, actual results may differ materially from those anticipated in
the forward-looking statements. Additional information on these and other
factors that could effect True's operations and financial results are included
in reports on file with Canadian securities regulatory authorities and may be
accessed through the SEDAR website (www.sedar.com), at True's website
(www.trueenergytrust.com). Furthermore, the forward-looking statements
contained herein are made as at the date hereof and True does not undertake
any obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information, future
events or otherwise, except as may be required by applicable securities laws.
    The reader is further cautioned that the preparation of financial
statements in accordance with GAAP requires management to make certain
judgments and estimates that affect the reported amounts of assets,
liabilities, revenues and expenses. Estimating reserves is also critical to
several accounting estimates and requires judgments and decisions based upon
available geological, geophysical, engineering and economic data. These
estimates may change, having either a negative or positive effect on net
earnings as further information becomes available, and as the economic
environment changes.

    Overview and Description of the Business

    True Energy Trust is a Canadian trust, formed in 2005 via the reverse
takeover of TKE Energy Trust. The Trust is involved in the exploration,
development and production of petroleum and natural gas in western Canada. The
Trust has a significant multi-year drilling inventory of locations in Alberta,
Saskatchewan and British Columbia.
    True's Trust units and convertible debentures are listed on the Toronto
Stock Exchange under the symbols TUI.UN and TUI.DB, respectively.

    First Quarter 2009 Financial and Operational Results

    Sales Volumes

    Sales volumes for the three months ended March 31, 2009 averaged 9,981
boe/d compared to 13,552 boe/d for the same period in 2008, representing a 26%
decrease. In comparison, sales volumes for the fourth quarter of 2008 averaged
10,750 boe/d. The decrease in average sales volumes from first quarter 2008 to
2009 is a result of natural production decline, minimal 2009 capital spending
and dispositions totaling approximately 1,000 boe/d that were closed during
the second quarter of 2008, partially offset by tuck-in acquisitions completed
in the fourth quarter of 2008 that added approximately 250 boe/d. Also, True's
production and operations have been negatively impacted by the extreme weather
conditions experienced in western Canada in December 2008 and extending into
February 2009. During the first quarter of 2009, True implemented a full scale
field optimization and maintenance program throughout True's operated
properties; the Trust operates 70% of its daily production. The initial
results are exceeding expectations as the program not only arrested True's
production decline in the first quarter, but increased overall deliverability
without drilling or recompleting wells. Production during the first week of
January 2009 was 9,800 boe/d, while 2009 first quarter production exit rate
was 10,150 boe/d.

    
    Sales Volumes
    -------------------------------------------------------------------------
                                                 Three months ended March 31,
                                                            2009        2008
    -------------------------------------------------------------------------
    Natural gas                  (mcf/d)                  36,928      52,252
    -------------------------------------------------------------------------

    Heavy oil                   (bbls/d)                   2,519       2,824
    Light oil and condensate    (bbls/d)                     959       1,391
    NGLs                        (bbls/d)                     348         628
    -------------------------------------------------------------------------
    Total crude oil and NGLs    (bbls/d)                   3,826       4,843
    -------------------------------------------------------------------------
    Total boe/d                    (6:1)                   9,981      13,552
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    During the first quarter of 2009, True did not participate directly in
further drilling. True continued its farm-out activities during the first
quarter. In Alberta, True farmed out its interest in 5 gross wells. These
natural gas wells were drilled at no cost to True and have resulted in an
average 24% interest in 5 successful wells. These wells were placed on
production in the first week of April.
    For the three months ended March 31, 2009, the weighting towards natural
gas sales averaged 62% compared to 64% in the same period in 2008. Heavy oil
sales made up 25% of total production for the 2009 first quarter compared to
21% in the 2008 first quarter.
    Sales of natural gas averaged 36.9 Mmcf/d for the first quarter of 2009,
compared to 52.3 Mmcf/d in the same 2008 period, a decrease of 29%. Crude oil
and NGL sales for the 2009 first quarter decreased 21% averaging 3,826 bbls/d
compared to 2008 average sales of 4,843 bbls/d.
    For 2009, production volumes are anticipated to average approximately
10,000 boe/d. The forecast of 2009 production volumes is based upon a number
of assumptions, including normal production declines and expenditures under
the current planned capital budget of $15 million.

    
    Commodity Prices

    Average Commodity Prices
    -------------------------------------------------------------------------
                                                 Three months ended March 31,
                                                2009        2008    % Change
    -------------------------------------------------------------------------

    Exchange rate (US$/Cdn$)                  0.8028      0.9950         (19)

    Natural gas:
    NYMEX (US$/mmbtu)                           4.47        8.64         (48)
    AECO daily index (CDN$/Mcf)                 4.92        7.88         (38)
    AECO monthly index (CDN$/Mcf)               5.63        7.13         (21)
    True's average price ($/mcf)                5.41        7.97         (32)
    True's average price (including
     hedging(1)) ($/mcf)                        6.21        7.99         (22)

    Crude oil:
    WTI (US$/bbl)                              43.31       97.22         (55)
    Edmonton par - light oil ($/bbl)           50.15       98.16         (49)
    Bow River - medium/heavy oil ($/bbl)       43.77       77.47         (44)
    Hardisty Heavy - heavy oil ($/bbl)         39.38       70.05         (44)
    True's average prices ($/bbl)
      Light crude oil, condensate, and NGLs    42.49       85.65         (50)
      Heavy crude oil                          33.71       61.55         (45)
      Total crude oil and NGLs                 36.71       71.59         (49)
      Total crude oil and NGLs (including
       hedging(1))                             36.71       61.98         (41)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Per unit metrics including hedging include realized gains or losses
        on commodity contracts and exclude unrealized gains or losses on
        commodity contracts.
    

    True's natural gas sales are priced with reference to the daily or
monthly AECO indices. During the 2009 first quarter, the AECO daily and
monthly reference price decreased by 38% and 21%, respectively, compared to
the same period in 2008. Similarly, True's average sales price before hedging
for the 2009 first quarter decreased by 32% compared to the same period in
2008. True's natural gas price after including hedging for the first quarter
of 2009 was $6.21/mcf compared to $7.99/mcf for the same period in 2008.
    The Trust has entered into a natural gas physical delivery sales contract
to sell 5,275 GJ/day at a fixed price of $7.29/GJ and $7.90/GJ for the third
and fourth quarter of 2009, respectively.
    For heavy crude oil, True received an average price before transportation
of $33.71/bbl in the 2009 first quarter, a decrease of 45% over prices in the
same period in 2008. The Bow River reference price and the Hardisty Heavy
reference price both decreased 44% from the 2008 first quarter to the 2009
first quarter. The majority of True's heavy crude oil density ranges between
11 and 16 degrees API consistent with the Hardisty Heavy reference price,
although all of True's heavy oil production is sold at Saskatchewan delivery
points.
    For light oil, condensate and NGLs, True recorded an average $42.49/bbl
before hedging in the 2009 first quarter, 50% lower than the average price of
$85.65/bbl received in the same period in 2008. In comparison, the Edmonton
par price decreased by 49% over the same period. The average WTI crude oil US
dollar based price decreased 55% from the first quarter of 2008 to that in
2009. The average US$/Cdn$ foreign exchange rate was 0.80 for the 2009 first
quarter compared to 0.99 during the same period in 2008. The negative
correlation between the Canadian dollar and U.S. dollar denominated WTI oil
prices has softened the impact on the Trust.
    WTI crude oil prices varied greatly throughout 2008, increasing
significantly to a high of US$147/bbl in July and dramatically falling during
the fourth quarter of 2008 with December 2008 prices of under US$40/bbl and
averaging over US$40/bbl for the first quarter of 2009. The pricing outlook in
2009 for crude oil and natural gas remains uncertain given the current global
economic environment.

    Revenue

    Revenue before other income and hedging for the three month period ended
March 31, 2009 was $30.6 million, 56% lower than the $69.4 million in the same
period in 2008. The decrease in revenue for the 2009 period was the result of
lower sales volumes in conjunction with significantly lower commodity prices.

    
    -------------------------------------------------------------------------
                                                 Three months ended March 31,
    ($000s)                                                 2009        2008
    -------------------------------------------------------------------------

    Light crude oil, condensate and NGLs                   4,998      15,734
    Heavy oil                                              7,643      15,818
    -------------------------------------------------------------------------
    Crude oil and NGLs                                    12,641      31,552
    Natural gas                                           17,993      37,894
    -------------------------------------------------------------------------
    Total revenue before other                            30,634      69,446
    Other(1)                                                 711         587
    -------------------------------------------------------------------------
    Total revenue before royalties and hedging            31,345      70,033
    -------------------------------------------------------------------------
    (1) Other revenue primarily consists of processing and other third party
    income.
    

    Revenues for the remainder of 2009 are currently expected to be lower
than 2008 due to lower commodity prices and average estimated 2009 production
of approximately 10,000 boe/d.

    Commodity Price Risk Management

    The Trust has a formal risk management policy which permits management to
use specified price risk management strategies for up to 50% of crude oil,
natural gas and NGL production including fixed price contracts, collars and
the purchase of floor price options and other derivative financial instruments
and physical delivery sales contracts to reduce the impact of price volatility
and ensure minimum prices for a maximum of eighteen months beyond the current
date. The program is designed to provide price protection on a portion of the
Trust's future production in the event of adverse commodity price movement,
while retaining significant exposure to upside price movements. By doing this,
the Trust seeks to provide a measure of stability to funds flow from
operations, as well as, to ensure True realizes positive economic returns from
its capital developments and acquisition activities. The Trust will continue
its hedging strategies focusing on maintaining sufficient cash flow to fund
True's operations. Any remaining unhedged production is realized at market
prices.
    A summary of the financial hedge volumes and average prices by quarter
currently outstanding as of May 7, 2009 is shown in the following tables:

    
    Natural gas
    Average Volumes (GJ/d)
    -------------------------------------------------------------------------
                                             Q2 2009     Q3 2009     Q4 2009
    -------------------------------------------------------------------------
    Fixed                                     25,050      19,500      15,000
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                 Q1 2010     Q2 2010     Q3 2010     Q4 2010
    -------------------------------------------------------------------------
    Fixed                         10,000       5,000           -           -
    Call option (ceiling price)    5,000       5,000       5,000       5,000
    -------------------------------------------------------------------------
    Total GJ/d                    15,000      10,000       5,000       5,000
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Average Price ($/GJ AECO C)
    -------------------------------------------------------------------------
                                             Q2 2009     Q3 2009     Q4 2009
    -------------------------------------------------------------------------
    Fixed                                       6.01        5.97        6.75
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                 Q1 2010     Q2 2010     Q3 2010     Q4 2010
    -------------------------------------------------------------------------
    Fixed                           7.58        6.59           -           -
    Call option (ceiling price)     8.05        8.05        8.05        8.05
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Crude oil and liquids
    Average Volumes (bbls/d)
    -------------------------------------------------------------------------
                                             Q2 2009     Q3 2009     Q4 2009
    -------------------------------------------------------------------------
    Costless collars                             500         500         500
    -------------------------------------------------------------------------
    Total bbls/d                                 500         500         500
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Average Price (CDN$/bbl WTI)
    -------------------------------------------------------------------------
                                             Q2 2009     Q3 2009     Q4 2009
    -------------------------------------------------------------------------
    Collar ceiling price                       80.70       80.70       80.70
    Collar floor price(1)                      52.30       52.30       52.30
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Subsequent to March 31, 2009, this oil collar was converted to
        Canadian dollar denomination as priced at $52.30 CDN and $80.70 CDN
        as compared to $42.50 US and $65.60 US, respectively.
    

    Included in the above natural gas table is a fixed price contract of
$5.90/GJ at 5,000 GJ/d for the second quarter 2009 to fourth quarter 2009
periods which was funded by selling a call option of 5,000 GJ/d at $8.05 for
the 2010 year.
    As of March 31, 2009, the fair value of True's outstanding commodity
contracts is a net unrealized asset of $11.6 million as reflected in the
financial statements. The fair value or mark-to-market value of these
contracts is based on the estimated amount that would have been received or
paid to settle the contracts as at March 31, 2009 and may be different from
what will eventually be realized. Changes in the fair value of the commodity
contracts are recognized in the Consolidated Statements of Loss within the
financial statements.
    The following is a summary of the gain (loss) on commodity contracts for
the three months ended March 31, 2009 and 2008 as reflected in the
Consolidated Statements of Loss in the financial statements:

    
    Commodity contracts
    -------------------------------------------------------------------------
                                           Crude Oil     Natural
    ($000s)                                & Liquids         Gas  2009 Total
    -------------------------------------------------------------------------
    Realized cash gain on contracts                -       2,631       2,631
    Unrealized gain (loss) on contracts(1)      (272)      8,116       7,844
    -------------------------------------------------------------------------
    Total gain (loss) on commodity contracts    (272)     10,747      10,475
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                           Crude Oil     Natural
    ($000s)                                & Liquids         Gas  2008 Total
    -------------------------------------------------------------------------
    Realized cash gain (loss) on contracts    (4,239)         97      (4,142)
    Unrealized gain (loss) on contracts(1)       898     (18,585)    (17,687)
    -------------------------------------------------------------------------
    Total gain (loss) on commodity contracts  (3,341)    (18,488)    (21,829)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Unrealized gain (loss) commodity contracts represent non-cash
        adjustments for changes in the fair value of these contracts during
        the period.

    Royalties

    For the three months ended March 31, 2009, total royalties were $6.3
million, compared to $15.0 million incurred in the same period in 2008. 
Overall royalties as a percentage of revenue (after transportation costs) in
the first quarter of 2009 were 22%, compared with 23% over the same period in
2008.

    -------------------------------------------------------------------------
    Royalties by Commodity Type                  Three months ended March 31,
    ($000s, except where noted)                             2009        2008
    -------------------------------------------------------------------------
    Light crude oil, condensate and NGLs                   1,361       3,766
      $/bbl                                                11.57       20.50
      Average light crude oil, condensate and
       NGLs royalty rate (%)                                  27          25

    Heavy Oil                                              1,849       2,291
      $/bbl                                                 8.16        8.91
      Average heavy oil royalty rate (%)                      24          15

    Natural Gas                                            3,098       9,443
      $/mcf                                                 0.93        1.99
      Average natural gas royalty rate (%)                    17          25

    -------------------------------------------------------------------------
    Total                                                  6,308      15,500
    -------------------------------------------------------------------------
    $/boe                                                   7.02       12.57
    -------------------------------------------------------------------------
    Average total royalty rate (%)                            22          23
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Royalties, by Type
    -------------------------------------------------------------------------
                                                 Three months ended March 31,
    ($000s)                                                 2009        2008
    -------------------------------------------------------------------------
    Crown royalties                                        3,073       9,899
    Freehold & GORR                                        1,848       4,215
    Indian Oil and Gas Canada royalties                    1,189       1,386
    Saskatchewan resource surcharge                          198           -
    -------------------------------------------------------------------------
    Total                                                  6,308      15,500
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Expenses
    -------------------------------------------------------------------------
                                                 Three months ended March 31,
    ($000s)                                                 2009        2008
    -------------------------------------------------------------------------
    Production                                            13,946      16,996
    Transportation                                         1,563         843
    General and administrative                             2,842       3,770
    Interest and financing charges                         3,302       4,516
    Unit-based compensation                                 (603)        269
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Expenses per boe
    -------------------------------------------------------------------------
                                                 Three months ended March 31,
    ($ per boe)                                             2009        2008
    -------------------------------------------------------------------------
    Production                                             15.53       13.78
    Transportation                                          1.74        0.68
    General and administrative                              3.16        3.06
    Interest and financing charges                          3.68        3.66
    Unit-based compensation                                (0.67)       0.22
    -------------------------------------------------------------------------
    

    Production Expenses

    For the three months ended March 31, 2009, production expenses totaled
$13.9 million ($15.53/boe), compared to $17.0 million ($13.78/boe) recorded in
the same 2008 period. Fuel gas costs associated with steam generation at the
Kerrobert facility contributed $1.30/boe to production expenses in the first
quarter of 2009, as compared to $1.83/boe in the first quarter of 2008. In
addition, the fixed component of certain production expenses combined with
reduced sales volumes between comparable periods has contributed to the
increase in costs on a per boe basis from first quarter 2008 to first quarter
2009. In comparison, production expenses were $17.9 million ($18.11/boe) and
$66.6 million ($15.33/boe) for the fourth quarter 2008 and annual 2008
periods, respectively.
    True is targeting operating costs of approximately $48.8 million
($13.40/boe) in 2009 which based on assumptions of estimated production of
approximately 10,000 boe/d and planned cost reductions. Forecasted cost
reductions are on track through the first quarter of 2009.

    
    Production Expenses, by Commodity Type

    -------------------------------------------------------------------------
                                                 Three months ended March 31,
    ($000s, except where noted)                             2009        2008
    -------------------------------------------------------------------------
    Light crude oil, condensate and NGLs                   2,278       3,081
    $/bbl                                                  19.37       16.77

    Heavy oil                                              4,736       5,035
    $/bbl                                                  20.89       19.59

    Natural gas                                            6,932       8,880
    $/mcf                                                   2.09        1.87

    -------------------------------------------------------------------------
    Total                                                 13,946      16,996
    -------------------------------------------------------------------------
    $/boe                                                  15.53       13.78
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total                                                 13,946      16,996
    -------------------------------------------------------------------------
    Processing and other third party income(1)              (710)       (587)
    -------------------------------------------------------------------------
    Total after deducting processing and other third
     party income                                         13,236      16,409
    -------------------------------------------------------------------------
    $/boe                                                  14.73       13.31
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Processing and other third party income is included within petroleum
        and natural gas sales on the statement of income.
    

    Transportation

    Transportation expenses for the three month period ended March 31, 2009
were $1.6 million ($1.74/boe) compared to $0.8 million ($0.68/boe) in the same
2008 period. Lower transportation expense for the first quarter of 2008 was
due to the impact of accrual reversals; excluding these adjustments,
transportation for the 2008 period would have been $1.8 million ($1.47/boe).
In comparison, transportation was $1.21/boe and $1.62/boe for fourth quarter
2008 and 2008 annual periods, respectively.

    Operating Netback

    For the first quarter of 2009, corporate field operating netback (before
hedging) was $9.81/boe compared to $29.28/boe in the same period in 2008. This
was the result of decreased overall commodity prices, higher transportation
and operating costs offset by a decrease in royalties. After including hedging
activities, the corporate field operating netback for the first quarter of
2009 was $12.74/boe compared to $25.92/boe in the same 2008 period.

    
    Field Operating Netback - Corporate (before hedging)
    -------------------------------------------------------------------------
                                                 Three months ended March 31,
    ($/boe)                                                 2009        2008
    -------------------------------------------------------------------------
    Sales                                                  34.10       56.31
    Transportation                                         (1.74)      (0.68)
    Royalties                                              (7.02)     (12.57)
    Production expense                                    (15.53)     (13.78)
    -------------------------------------------------------------------------
    Field operating netback                                 9.81       29.28
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Overall, corporate operating netbacks for the remainder of 2009 are
currently expected to be lower than 2008 due to anticipated lower commodity
prices.
    Field operating netback for natural gas in the first quarter of 2009
decreased 48% to $2.19/mcf, compared to $4.21/mcf in the same 2008 period,
reflecting weakening natural gas prices experienced, higher transportation and
production expenses, offset by a reduction in royalties. After including
hedging activities, field operating netback for natural gas in the three
months ended March 31, 2009 was $2.98/mcf compared to $4.23/mcf in the same
period in 2008.

    
    Field Operating Netback - Natural Gas (before hedging)
    -------------------------------------------------------------------------
                                                 Three months ended March 31,
    ($/mcf)                                                 2009        2008
    -------------------------------------------------------------------------
    Sales                                                   5.41        7.97
    Transportation                                         (0.20)       0.10
    Royalties                                              (0.93)      (1.99)
    Production expense                                     (2.09)      (1.87)
    -------------------------------------------------------------------------
    Field operating netback                                 2.19        4.21
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Field operating netback for crude oil, condensate and NGLs averaged
$4.44/bbl in the first quarter of 2009, representing an 88% decrease from the
first quarter 2008 operating netback of $36.48/bbl. This compares to a 49%
decrease in the crude oil, condensate and NGLs sales price combined with an
11% increase in production expenses. After including hedging activities, field
operating netback for crude oil and NGLs in the 2009 first quarter was
$4.44/boe compared to $26.86/boe in the same period in 2008.

    
    Field Operating Netback - Crude Oil, Condensate and NGLs (before hedging)
    -------------------------------------------------------------------------
                                                 Three months ended March 31,
    ($/bbl)                                                 2009        2008
    -------------------------------------------------------------------------
    Sales                                                  36.71       71.59
    Transportation                                         (2.58)      (2.95)
    Royalties                                              (9.32)     (13.74)
    Production expense                                    (20.37)     (18.42)
    -------------------------------------------------------------------------
    Field operating netback                                 4.44       36.48
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    General and Administrative

    Net general and administrative ("G&A") expenses in the three months ended
March 31, 2009 were $2.8 million compared to $3.8 million for the same period
in 2008. The decrease in the G&A expense for the 2009 first quarter compared
to the 2008 first quarter is primarily due to targeted G&A reductions
completed in January 2009. True streamlined its operations and reduced head
office staffing levels by one third in January 2009. The reduction in amounts
of capitalized G&A for the 2009 first quarter is consistent with a lower
capital program. On a per boe basis, G&A expenses for the three month period
ended March 31, 2009 were $3.16/boe compared to $3.06/boe for the same period
in 2008. The increase in G&A on a per boe basis is consistent with reduced
sales volumes experienced in 2009 compared to 2008. In comparison, G&A
expenses were $4.1 million or $4.13/boe for the fourth quarter of 2008.

    
    General and Administrative Expenses
    -------------------------------------------------------------------------
                                                 Three months ended March 31,
    ($000s, except where noted)                             2009        2008
    -------------------------------------------------------------------------
    Gross expenses                                         3,386       4,879
    Capitalized                                             (106)       (507)
    Recoveries                                              (438)       (602)
    -------------------------------------------------------------------------
    Net G&A expenses                                       2,842       3,770
    -------------------------------------------------------------------------
    Net G&A expenses, per unit ($/boe)                      3.16        3.06
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Interest and Financing Charges

    True recorded $3.3 million of interest and financing charges for the
three months ended March 31, 2009 compared to $4.5 million in the same period
in 2008. True's total net debt at March 31, 2009 of $213.9 million includes
the $81.6 million liability portion of convertible debentures, $131.6 million
of bank debt and the net balance of a working capital deficiency. The
convertible debentures have a maturity date of June 30, 2011.

    
    Interest and Financing Charges
    -------------------------------------------------------------------------
                                                 Three months ended March 31,
    ($000s, except where noted)                             2009        2008
    -------------------------------------------------------------------------
    Interest and financing charges                         3,302       4,516
    Interest and financing charges ($/boe)                  3.68        3.66

    Debt to funds flow from operations ratio
     (annualized)(2)
    Total net debt(1) at quarter end                     213,929     239,468
    Total net debt to periods funds flow from
     operations ratio (annualized)                          8.2x        2.5x

    Net debt(1) (excluding convertible debentures)
     at quarter end                                      132,331     159,631
    Net debt to periods funds flow from operations
     ratio (annualized)(2)                                  5.1x        1.6x

    Debt to funds flow from operations ratio
     (trailing)(3)
    Total net debt to periods funds flow from
     operations ratio (trailing)                            3.6x        2.5x
    Net debt to periods funds flow from operations
     ratio (trailing)                                       2.2x        1.7x
    -------------------------------------------------------------------------
    (1) Net debt includes the net working capital deficiency (excess) before
        short-term commodity contract assets and liabilities, current portion
        of long-term debt and short-term future tax assets and liabilities.
        Total net debt also includes the liability component of convertible
        debentures and excludes asset retirement obligations and the future
        income tax liability.
    (2) Total net debt and net debt to periods funds flow from operations
        ratio (annualized) is calculated based upon first quarter funds flow
        from operations annualized.
    (3) Trailing periods funds flow from operations is based on the trailing
        twelve month period ended March 31, 2009 and 2008.
    

    Unit-Based Compensation

    Non-cash unit-based compensation expense for the three month period ended
March 31, 2009 was a recovery of $0.6 million compared to an expense of $0.3
million in the same 2008 period. The 2009 first quarter recovery was a result
of the reversal of $0.8 million of prior period unit-based compensation
expense for 2009 forfeitures of unvested incentive rights, net of $0.2 million
expense recorded for outstanding incentive units.

    Depletion, Depreciation and Accretion

    Depletion, depreciation and accretion expense for the three months ended
March 31, 2009 was $27.2 million ($30.34/boe), compared to the $36.3 million
($29.44/boe) in the same period in 2008, which reflects lower production
volumes combined with reduced carrying costs in the 2009 period as compared to
2008.
    For the three months ended March 31, 2009, True has included $62.7
million for future development costs in the depletion calculation and excluded
from the depletion calculation $28.2 million for undeveloped land and $42.6
million for estimated salvage.

    
    Depletion, Depreciation and Accretion Costs
    -------------------------------------------------------------------------
                                                 Three months ended March 31,
    ($000s, except where noted)                             2009        2008
    -------------------------------------------------------------------------
    Depletion and Depreciation                            26,593      35,748
    Accretion                                                662         555
    -------------------------------------------------------------------------
      Total                                               27,255      36,303
    -------------------------------------------------------------------------
    Per unit ($/boe)                                       30.34       29.44
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Income Taxes

    For the three months ended March 31, 2009, the Trust has recorded no
capital tax expense compared to $0.5 million expensed in the same period in
2008. Prior to January 1, 2009, capital taxes were based on a combination of
debt and equity levels of the Trust at the end of the year in addition to a
resource surcharge component of Saskatchewan provincial taxes calculated as a
percentage of revenues. Effective for True's 2009 taxation year, this
Saskatchewan tax has been changed such that it is calculated solely as a
percentage of revenues. Accordingly, this Saskatchewan tax is grouped with
royalties on a prospective basis.
    Future income taxes arise from differences between the accounting and tax
bases of the Trust's assets and liabilities. For the three months ended March
31, 2009, the Trust recognized a future income tax recovery of $3.7 million
compared to a recovery of $11.8 million in the same period in 2008.
    Under our current structure, the operating entities may make interest and
royalty payments to the Trust, which transfers taxable income to the Trust to
eliminate income subject to corporate and other income taxes in the operating
entities. Alternatively, the Trust's operating company may claim discretionary
tax deductions to reduce taxable income. Under the SIFT legislation (as
referred to below), amounts transferred to the Trust could be taxable
beginning in 2011 as distributions will no longer be deductible for income tax
purposes. At that time, True could claim discretionary tax deductions in its
operating companies, reduce the income transferred to the Trust, and pay all
or a portion of distributions as a return of capital. Until 2011, under the
terms of its trust indenture, the Trust is required to distribute amounts at
least equal to its taxable income. In the event that the Trust has
undistributed taxable income in a taxation year (prior to 2011), an additional
special taxable distribution, subject to certain withholding taxes for
non-resident holders, would be required under the trust indenture.
    The SIFT legislation is not expected to directly affect our cash flow
levels and distribution policies until 2011 at the earliest.

    Enactment of the Tax on Income Trusts

    On June 22, 2007, the legislation implementing a new tax (the "SIFT tax")
on publicly traded income trusts and limited partnerships, referred to as
"specified investment flow-through" ("SIFTs") entities (Bill C-52) received
Royal Assent. As a result, the SIFT tax was considered to be enacted for
accounting purposes in June 2007, which resulted in a $1.2 million future
income tax recovery amount being recorded in 2007 to reflect current temporary
differences between the book and tax basis of assets and liabilities expected
to be remaining in the Trust in 2011. The SIFT tax announcement and the
related future income tax recovery did not affect cash flow or distributions
and is not expected to affect distribution policies until 2011 at the
earliest.
    SIFTs are certain publicly traded income and royalty trusts and limited
partnerships including True. For SIFTs in existence on October 31, 2006 the
SIFT tax will be effective in 2011, unless certain rules related to "undue
expansion" are not adhered to. Under the guidance provided, True can increase
its equity by approximately $737 million between 2006 and 2011 without
prematurely triggering the SIFT tax.
    In June 2008, Bill C-50, which contained legislation to adjust the deemed
provincial component of the SIFT tax on distributions from SIFTs expected to
apply to the Trust commencing in 2011, received Royal Assent. Under
regulations now enacted, instead of basing the provincial component of the
SIFT tax on a flat rate of 13%, the provincial component will instead be based
on the general provincial corporate income tax rate in each province in which
the SIFT has a permanent establishment. For purposes of calculating this
component of the tax, the general corporate taxable income allocation formula
will be used. Specifically, the Trust's taxable distributions will be
allocated to provinces by taking the pro rata of:

    
    -   that proportion of the Trust's taxable distributions for the year
        that the Trust's wages and salaries in the province are of its total
        wages and salaries in Canada; and
    -   that proportion of the Trust's taxable distributions for the year
        that the Trust's gross revenues in the province are of its total
        gross revenues in Canada.
    

    Under the regulations, the Trust would be considered to have a permanent
establishment only in Alberta, where the provincial tax rate in 2011 is
expected to be 10%. As of March 4, 2009, the regulations are substantively
enacted.
    On July 14, 2008, the Department of Finance released proposed amendments
(the "Conversion Rules") to the Income Tax Act (Canada) to facilitate the
conversion of existing SIFTs into corporations. In general, the proposed
amendments will permit a conversion to be tax deferred for both the
unitholders and the SIFT if completed before 2013. These rules were
subsequently revised and introduced as part of Bill C-10 as part of the Budget
Implementation Act, 2009 on February 6, 2009 and received Royal Assent on
March 12, 2009.
    The True Board of Directors and Management continue to review the impact
of this tax on business strategy as well as the Conversion Rules in
considering alternatives available. At the present time, True believes some or
all of the following actions will or could result due to the enactment of the
SIFT tax:

    
    -   If structural or other similar changes are not made if and to the
        extent that the Trust makes distributions to unitholders, the
        distribution yield net of the SIFT tax in 2011 and beyond to taxable
        Canadian investors will remain approximately the same; however, the
        distribution yield to tax-deferred Canadian investors (RRSPs, RRIFs,
        pension plans, etc.) would fall by an estimated 26.5 percent in 2011
        and 25.0 percent in 2012 and beyond. For U.S. investors, the
        distribution yield net of the SIFT and withholding taxes would fall
        by an estimated 25.3 percent in 2011 and 25.1 percent in 2012 and
        beyond;
    -   If and to the extent that the Trust makes distributions to
        unitholders, a portion of True's cash flow could be allocated to the
        payment of the SIFT tax, or other forms of tax, and would not be
        available for distribution or re-investment;
    -   True could convert to a corporate structure to facilitate investing a
        higher proportion or all of its cash flow in exploration and
        development projects. Such a conversion and change to capital
        programs could result in a significant continued elimination of
        distributions and/or dividends;
    -   True might determine that it is more economic to remain in the trust
        structure, at least for a period of time, and shelter its taxable
        income using discretionary tax deductions and, if and to the extent
        that it reinstates the payments of distributions, pay all or a
        portion of its distributions (if any) on a return of capital basis,
        likely at a lower payout ratio.
    

    The Trust is reviewing all organizational structures and alternatives to
minimize the impact of the SIFT tax on our unitholders. While there can be no
assurance that the negative effect of the tax can be minimized or eliminated,
True and its advisors will continue to review these issues.
    As at March 31, 2009, the operating subsidiaries and the Trust itself
have a total net future income tax liability balance of $40.2 million.
Canadian GAAP requires that a future income tax liability be recorded when the
book value of assets exceeds the balance of tax pools.
    At March 31, 2009, the Trust and operating subsidiaries of the Trust had
approximately $494 million in tax pools available for deduction against future
income as follows:

    
    -------------------------------------------------------------------------
                                                      Operating
    ($000s)                                  Trust subsidiaries        Total
    -------------------------------------------------------------------------
    Intangible resource pools               15,000      308,000      323,000
    Undepreciated capital cost                   -      129,000      129,000
    Loss carryforwards
     (expire through 2027)                       -       40,000       40,000
    Unit issue costs                         2,000            -        2,000
    -------------------------------------------------------------------------
                                            17,000      477,000      494,000
    -------------------------------------------------------------------------
    

    Net Loss and Funds Flow from Operations

    True generated funds flow from operations of $6.5 million ($0.08 per
diluted unit) for the three month period ended March 31, 2009, down 73% from
$24.2 million ($0.30 per diluted unit) for the first quarter of 2008. The
decrease in funds flow for the 2009 period compared to the same period in 2008
was primarily the result of a significant decrease in commodity prices, in
combination with lower sales volumes. Funds flow from operations for the first
quarter of 2009 increased 10% from fourth quarter 2008 funds flow from
operations of $5.9 million.
    True maintains a commodity price risk management program to provide a
measure of stability to funds flow from operations. Unrealized mark-to-market
gains or losses are non-cash adjustments to the current fair market value of
the contract over its entire term and are included in the calculation of net
loss.
    True generated a net loss of $9.1 million ($0.12 per diluted unit) in the
first quarter of 2009 compared to a net loss of $18.6 million ($0.24 per
diluted unit) in 2008. The decrease in the net loss from the first quarter
2008 to that in 2009 was primarily due to non-cash unrealized gains on
commodity contracts, reduced non-cash charges for depletion, depreciation and
accretion, offset by a reduced future income tax recovery and lower funds flow
from operations.

    
    Funds Flow From Operations and Net Loss
    -------------------------------------------------------------------------
                                                 Three months ended March 31,
    ($000s, except per unit amounts)                        2009        2008
    -------------------------------------------------------------------------
    Funds flow from operations                             6,489      24,233
      Basic   ($/unit)                                      0.08        0.31
      Diluted ($/unit)                                      0.08        0.30
    Net loss                                              (9,056)    (18,621)
      Basic   ($/unit)                                     (0.12)      (0.24)
      Diluted ($/unit)                                     (0.12)      (0.24)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Reconciliation of Funds Flow from Operations and Cash Flow from Operating
    Activities
    -------------------------------------------------------------------------
                                                 Three months ended March 31,
    ($000s, except per unit amounts)                        2009        2008
    -------------------------------------------------------------------------
    Funds flow from operations                             6,489      24,233
    Asset retirement costs incurred                         (738)       (589)
    Change in non-cash working capital                     3,560      (5,801)
    -------------------------------------------------------------------------
    Cash flow from operating activities                    9,311      17,843
    -------------------------------------------------------------------------
    

    Capital Expenditures

    True planned for a very modest capital program for the first quarter of
2009. First quarter 2009 capital spending was $2.8 million, as compared to
$8.7 million for the same period in 2008. The first quarter 2009 capital
program was primarily focused on the tie-in of two gross (1 net) Saddle Lake
natural gas wells drilled in the fourth quarter of 2008 and performing certain
workovers, in addition to further drilling and completion costs received from
non-operated projects.

    
    Capital Expenditures
    -------------------------------------------------------------------------
                                                 Three months ended March 31,
    ($000s)                                                 2009        2008
    -------------------------------------------------------------------------
    Lease acquisitions and retention                          83         550
    Geological and geophysical                                11          67
    Drilling and completion costs                          1,306       6,512
    Facilities and equipment                               1,128       1,324
    -------------------------------------------------------------------------
      Exploration and development(1)                       2,528       8,453
    Corporate and property acquisitions                      228         197
    -------------------------------------------------------------------------
      Total capital expenditures - cash                    2,756       8,650
    Property dispositions - cash                               8      (5,788)
    -------------------------------------------------------------------------
      Total net capital expenditures - cash                2,764       2,862
    -------------------------------------------------------------------------
    Other - non-cash(2)                                     (114)       (193)
    -------------------------------------------------------------------------
      Total net capital expenditures(1)                    2,650       2,669
    -------------------------------------------------------------------------
    (1) Excludes capitalized costs related to asset retirement obligation
        expenditures incurred during the year.
    (2) Other includes non-cash adjustments for current period's asset
        retirement obligations and unit based compensation capitalized.
    

    The $2.8 million capital program for the three months ended March 31,
2009, was financed entirely with funds flow from operations.
    Based on the current economic conditions and True's operating forecast
for the remainder of 2009, the Trust has budgeted a 2009 capital program of
$15 million.

    Land

    True's net mineral leases in Alberta, British Columbia and Saskatchewan
as of March 31, 2009 decreased to approximately 358,000 net acres from 377,000
net acres established on December 31, 2008. These expiries were primarily in
non-core areas where technical data did not support drilling activity. An
integral component of our growth strategy is to aggressively farmout our
interest in non-core areas.

    Ceiling Test

    The Trust calculates a ceiling test quarterly and annually to place a
limit on the aggregate carrying value of its capitalized costs, which may be
amortized against revenues of future periods. The ceiling test is performed in
accordance with the requirements of the Canadian Institute of Chartered
Accountants ("CICA") AcG-16 "Oil and Gas Accounting - Full Cost", a two step
process.
    The Trust performed a ceiling test calculation at March 31, 2009
resulting in undiscounted cash flows from proved reserves and the undeveloped
properties not exceeding the carrying value of oil and gas assets.
Consequently, True performed stage two of the ceiling test assessing whether
discounted future cash flows from the production of proved plus probable
reserves plus the carrying cost of undeveloped properties, net of any
impairment allowance, exceeds the carrying value of its petroleum and natural
gas properties. No impairment in oil and gas assets was identified as at March
31, 2009.
    The ceiling test calculation will be updated in 2009 on a quarterly and
annual basis based upon the latest available data, including but not limited
to an updated annual external reserve engineering report which incorporates a
full evaluation of reserves or internal reserve updates at quarterly periods,
and the latest commodity pricing deck. Estimating reserves is very complex,
requiring many judgments based on available geological, geophysical,
engineering and economic data. Changes in these judgments could have a
material impact on the estimated reserves. These estimates may change, having
either a negative or positive effect on net earnings as further information
becomes available and as the economic environment changes.

    Asset Retirement Obligations

    As at March 31, 2009, the Trust has recorded an Asset Retirement
Obligation ("ARO") of $34.2 million, compared to $33.7 million at December 31,
2008 for future abandonment and reclamation of the Trust's properties. For the
three months ended March 31, 2009, the ARO increased by $0.5 million total as
a result of accretion expense of $0.6 million, $0.8 million net changes in
estimates and liabilities incurred on development activities, offset by $0.2
million of liabilities released on dispositions and $0.7 million of
liabilities settled.

    
    Distributions

    For the three months ended March 31, 2009 Trust declared distributions as
follows:

    -------------------------------------------------------------------------
    ($000s, except per unit amount)                 Distribution
    Three months ended March 31, 2009                   Per Unit       Total
    -------------------------------------------------------------------------

    Distributions declared                            $     0.02  $    1,570
    -------------------------------------------------------------------------

    Distribution Paid History(1)

    Distributions comprise a taxable portion and a return of capital portion
(tax deferred). The return of capital component reduces the cost basis of the
trust units held, as described below. For additional information, please see
our website at www.trueenergytrust.com.

    -------------------------------------------------------------------------
                                       Distributions     Taxable   Return of
    Calendar Year                           per unit     Portion     Capital
    -------------------------------------------------------------------------

    2005 (two months)(2)                  $    0.480  $    0.456  $    0.024
    2006                                  $    2.640  $    2.033  $    0.607
    -------------------------------------------------------------------------
    Cumulative to Dec. 31, 2006           $    3.120  $    2.489  $    0.631
    -------------------------------------------------------------------------
    2007 year                             $    0.960  $    0.960           -
    -------------------------------------------------------------------------
    Cumulative to Dec. 31, 2007           $    4.080  $    3.449  $    0.631
    -------------------------------------------------------------------------
    2008 year                             $    0.460  $    0.460           -
    -------------------------------------------------------------------------
    Cumulative to December 31, 2008       $    4.540  $    3.909  $    0.631
    -------------------------------------------------------------------------
    2009 year to date (one month)(3)      $    0.020
    -------------------------------------------------
    Cumulative to January 31, 2009        $    4.560
    -------------------------------------------------
    (1) Applies to unitholders who are residents of Canada and hold their
        trust units as capital property.
    (2) Based upon the distributions paid in the 2005 calendar year, after
        the November 2, 2005 Arrangement with TKE Energy Trust.
    (3) It is currently estimated that the approximate taxable portion of the
        January 2009 distribution to Canadian unitholders will be 100%.

        In consultation with its U.S. tax advisors, True believes that its
        Trust units should be "qualified dividends" for U.S. federal
        purposes. As such, the portion of distributions made during 2009 that
        are considered dividends for U.S. federal purposes should qualify for
        the reduced rate of tax applicable to long-term capital gains.
        Unitholders or potential unitholders should consult their own legal
        or tax advisors as to their particular income tax consequences of
        holding True units. Please review our February 19, 2009 press release
        addressing this.

    Monthly Distributions

    Actual distributions paid and declared per Trust unit along with relevant
payment dates for 2009 to date are as follows:

    -------------------------------------------------------------------------
    Ex-distribution                                             Distribution
    Date                 Record Date          Payment Date          per unit
    -------------------------------------------------------------------------
    December 29, 2008    December 31, 2008    January 15, 2009          0.02
    January 28, 2009     January 30, 2009     February 17, 2009         0.02
    -------------------------------------------------------------------------
    

    During the first quarter 2009, funding requirements for distributions
declared was 24% of funds flow from operations.
    February and March 2009 distributions were suspended. As announced on
March 17, 2009, due to the continued deterioration in economic conditions,
including the significant decline in crude oil and natural gas prices, a
weakening outlook for natural gas demand and heightened risk in the credit
markets, True has deemed it prudent to suspend distributions, until further
notice, to maintain corporate liquidity during the current financial turmoil
and prevailing commodity price environment. Distributions remain suspended
until such time as the Board of Directors determines otherwise. Pursuant to
True's credit facility, distributions to unitholders (other than by way of the
issuance of Trust units) require the approval of True's lenders if the funds
to pay such distributions are received from True Energy Inc. ("True Energy").

    Foreign Ownership Update

    Based on information from Trust records and information provided by
intermediaries holding Trust units for others, the Trust estimates that, as of
April 24, 2009 approximately 25 percent of unitholders are non-Canadian
residents with the remaining 75 percent being Canadian residents.
    In order that the Trust maintain its status as a "mutual fund trust"
under the Income Tax Act (Canada), certain provisions of the Income Tax Act
(Canada) require that the trust not be established or maintained primarily for
the benefit of non-residents of Canada ("non-residents"). The trust indenture
for the Trust provides that if the Trust or its administrator becomes aware
that the activities of the Trust and ownership of Trust units by non-residents
may threaten the status of the Trust under the Income Tax Act (Canada) as a
"unit trust" or "mutual fund trust", the Trust is authorized to take action as
may be necessary to maintain the status of the Trust as a unit trust and a
mutual fund trust, including the imposition or restrictions on the issuance by
the Trust, or the transfer by any unitholder, of Trust units to a
non-resident.

    Liquidity and Capital Resources

    As an oil and gas business, the Trust has a declining asset base and
therefore relies on ongoing development and acquisitions to replace production
and add additional reserves. Future oil and natural gas production and
reserves are highly dependent on the success of exploiting the Trust's
existing asset base and in acquiring additional reserves. To the extent the
Trust is successful or unsuccessful in these activities; funds flow could be
increased or reduced.
    Global financial markets continued to remain fragile during the first
quarter of 2009. The economic crisis continues to put a strain on credit and
equity markets as characterized by a decline in liquidity and higher borrowing
costs. Access to capital markets has become constrained and significantly more
expensive for the Trust along with other oil and gas entities. The current
global economic environment has continued to create volatility in commodity
prices, tempered somewhat by the growing US to Canadian dollar exchange rate.
Given the continuing uncertain economic conditions, the Trust has a 2009
capital budget of $15 million and has suspended distributions until further
notice. The Trust continues to monitor forecasted debt levels to manage its
operations within forecasted cash flow. In addition, the Trust will continue
to monitor developments within the global economic environment to consider the
impacts on current or future lending arrangements.
    Liquidity risk is the risk that the Trust will not be able to meet its
financial obligations as they fall due. The Trust actively manages its
liquidity through daily and longer-term cash, debt and equity management
strategies. Such strategies encompass, among other factors: having adequate
sources of financing available through its bank credit facilities, estimating
future cash generated from operations based on reasonable production and
pricing assumptions, analysis of economic hedging opportunities, and
maintaining sufficient cash flows for compliance with debt covenants. The
Trust is fully compliant with all of its debt covenants.
    The Trust generally relies on operating cash flows and its credit
facilities to fund capital requirements and provide liquidity. Future
liquidity depends primarily on cash flow generated from operations, existing
credit facilities and the ability to access debt and equity markets. From time
to time, the Trust accesses capital markets to meet its additional financing
needs and to maintain flexibility in funding its capital programs. There can
be no assurance that debt or equity financing, or cash generated by operations
will be available or sufficient to meet these requirements or for other
corporate purposes or, if debt or equity financing is available, that it will
be on terms acceptable to the Trust. The inability of the Trust to access
sufficient capital for its operations could have a material adverse effect on
the Trust's business financial condition, results of operations and prospects.
    Credit risk is the risk of financial loss to the Trust if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Trust's trade receivables from
joint venture partners, petroleum and natural gas marketers, and financial
derivative counterparties.
    A substantial portion of the Trust's accounts receivable are with
customers and joint interest partners in the petroleum and natural gas
industry and are subject to normal industry credit risks. The Trust sells
substantially all of its production to eight primary purchasers under standard
industry sale and payment terms. Purchasers of the Trust's natural gas, crude
oil and natural gas liquids are subject to a periodic internal credit review
to minimize the risk of non-payment. The Trust has continued to closely
monitor and reassess the creditworthiness of its counterparties, including
financial institutions. This has resulted in the Trust reducing or mitigating
its exposures to certain counterparties where it is deemed warranted and
permitted under contractual terms.
    The Trust may be exposed to third party credit risk through its
contractual arrangements with its current or future joint venture partners,
marketers of its petroleum and natural gas production and other parties. In
the event such entities fail to meet their contractual obligations to the
Trust, such failures may have a material adverse effect on the Trust's
business, financial condition, results of operations and prospects. In
addition, poor credit conditions in the industry and of joint venture partners
may impact a joint venture partner's willingness to participate in the Trust's
ongoing capital program, potentially delaying the program and the results of
such program until the Trust finds a suitable alternative partner.
    During 2009, the Trust has been executing several strategies for dealing
with these uncertain times.
    True's corporate thrust in 2009 is to continue to improve the Trust's
balance sheet by reducing total outstanding debt and streamlining its
operating cost structure. In 2009, True has limited its capital program to $15
million in an effort to maintain production and increase financial flexibility
to fund operations. This compares to the $43 million capital program employed
in 2008. As a consequence of a reduced capital program and strategic
divestitures completed in 2008, total net debt levels decreased by $25.5
million from $239.4 million at March 31, 2008 to $213.9 million at March 31,
2009. Total net debt excludes unrealized commodity contract assets and
liabilities, future income taxes and asset retirement obligations.
    Combined funding requirements for the January distribution declared and
True's capital expenditures represented 67% of funds flow from operations for
the 2009 first quarter.
    As a result of the continued deterioration in economic conditions,
including the significant decline in crude oil prices, a weakening outlook for
natural gas demand and a heightened risk in the credit markets, True has
deemed it prudent to suspend distributions to maintain corporate liquidity
during the current financial turmoil and prevailing commodity price
environment. Distributions remain suspended until such time as the Board of
Directors determines otherwise. Pursuant to True's credit facility,
distributions to unitholders (other than by way of the issuance of Trust
units) require the approval of True's lenders if the funds to pay such
distributions are received from True Energy.
    True continues to tighten its cost structure in the current economically
challenging climate with forecasted cuts from 2008 levels of 30% to total
operating expenses which includes G&A and lease operating costs in 2009. The
results through the first quarter are on track.
    True's capital budget for 2009 remains at $15 million and the Trust does
not anticipate capital spending to exceed $3 to $4 million for the first six
months of 2009. True believes that industry costs currently do not reflect
commodity prices and netback realizations. Our capital program for 2009 which
is not expected to exceed $15 million will reflect our future view of
commodity pricing, available acquisition opportunities, and trends in
operating costs. True continues to forecast 2009 production volumes to average
approximately 10,000 boe/d. The first half 2009 capital spending will be
limited to the tie-in of two successful Saddlelake natural gas wells drilled
in the fourth quarter of 2008, performing necessary maintenance programs
required due to extreme winter conditions in Alberta and Saskatchewan and
focusing on increasing production from existing wells through workovers.
    True's operating forecast for 2009 which assumes a CAD$/US$ exchange rate
of $0.82, WTI oil price ranging from US$50.00/bbl to US$55.00/bbl, AECO
natural gas price ranging from CAD$5.46/GJ ($6.00/mcf) to CAD$5.92/GJ
($6.50/mcf) and average annual production of approximately 10,000 boe/d
generates cash flow from operations ranging from $30 million to $40 million,
after deducting royalties, all operating costs (as reduced as discussed
herein), G&A and debt servicing costs. Based on the foregoing assumptions and
assuming 2009 distributions of $1.6 million coupled with the planned capital
budget of $15 million the Trust would utilize between approximately 40% - 60%
of the Trust's forecasted funds flow from operations.
    As an added layer of protection of its cash flow forecast, True has
hedged approximately 56% of its estimated natural gas production for the
second through fourth quarter of 2009 at a combined fixed price of $6.42 CAD
per GJ ($7.06/mcf). Approximately 18% of True's estimated natural gas
production is hedged for the first half of 2010 at an average price of $7.25
CAD per GJ ($7.96/mcf). For the period of March 1, 2009 to December 31, 2009,
True has entered into a crude oil collar to effectively hedge approximately
13% of its estimated 2009 crude oil production with a floor price of CAD
$52.30/bbl and a ceiling price of CAD $80.70/bbl. True maintains an active
commodity price risk management program focused on maintaining sufficient cash
flow to fund its operations.
    On April 23, 2009 True announced that its lenders have completed their
review of its borrowing base and that True has received an extension of its
credit facility until June 30, 2010. Effective April 1, 2009, the amount of
the renewed credit facility is $140 million, a decrease of $12 million from
the expiring facility. The revolving credit facility matures on June 30, 2010
and an extension of the facility will require unanimous consent of the
lenders. The credit facility consists of a $13.8 million demand operating
facility provided by one Canadian bank and a $126.2 million revolving term
credit facility provided by a syndicate of two Canadian chartered banks, a
Canadian financial institution, one institutional lender and a US bank. $11.5
million of the syndicated facility is with a US bank which must be repaid or
reallocated to one or more of the other four current members of the syndicate
or a new member on June 29, 2009. The facility is subject to review on June
29, 2009 with the next scheduled semi annual review thereafter to be completed
on September 30, 2009 and the borrowing base may be adjusted on these dates.
The borrowing base is subject to the lending syndicate's determination which
is based upon the latest reserves information, their internal commodity price
decks and other factors. In the event the borrowing base is lowered below the
drawn credit facility at that time, any shortfall would be required to be
repaid within 60 days of notification, or as otherwise agreed by the lending
syndicate, and this funding would currently be expected to come from
alternative sources of debt or equity financing or the proceeds from asset
dispositions as available. As at March 31, 2009, True had approximately $8.4
million available under the renewed facility to assist in managing its
operations and capital program.
    Pursuant to the renewed credit facility, distributions from True Energy
to the Trust during the remaining term of the facilities is generally
restricted other than to permit the semi-annual interest payments by the Trust
on June 30, 2009, December 31, 2009 and June 30, 2010 in respect of the
convertible debentures issued by the Trust (provided that the foregoing
distribution shall not be permitted if a borrowing base shortfall has occurred
and is continuing, a demand for payment has been made and remains outstanding,
a default or an event of default is then in existence or could reasonably be
expected to result from such distribution, or the distribution could impair
the ability of True Energy to satisfy its covenants and obligations to the
lenders under the credit facility). In addition, the credit facility provides
that, without the approval of True's lenders: (a) there shall be no
distributions by True Energy to the Trust to permit: (i) distributions by the
Trust to unitholders (other than distributions by way of the issuance of
further Trust units), (ii) the purchase or redemption (other than as set forth
above) of Trust units which would result in a cash payment to unitholders; or
(iii) principal repayments in respect of the convertible debentures issued by
the Trust and, (b) other than by way of issuance of further Trust units, there
shall be no dividends on or redemptions of exchangeable shares of True Energy.
    There are currently no commitments, other than those associated with the
Trust's credit facilities outlined above, its 2009 capital program of $3 to $4
million for the remaining first half of 2009, and the off-balance sheet
arrangements outlined below. The Trust continually monitors its capital
spending program in light of the recent volatility with respect to commodity
prices and Canadian dollar exchange rates with the aim of ensuring the Trust
will be able to meet future anticipated obligations incurred from normal
ongoing operations with funds flow from operations and draws on the Trust's
syndicated facility, as necessary. February and March 2009 distributions were
suspended; as announced on March 17, 2009, Trust unit distributions have been
suspended until further notice.
    On June 15, 2006 the Trust completed a bought deal public offering of
86,250 7.5% convertible unsecured subordinated debentures at a price of $1,000
per debenture for aggregate gross proceeds of $86,250,000. The debentures have
a face value of $1,000 per debenture and a maturity date of June 30, 2011. The
debentures bear interest at an annual rate of 7.50% payable semi-annually on
June 30 and December 31 in each year commencing December 31, 2006. The
debentures are convertible at anytime at the option of the holders into Trust
units of the Trust at a conversion price of $16.00 per trust unit. The Trust
will have the right to redeem all or a portion of the debentures at a price of
$1,050 per debenture after June 30, 2009 and on or before June 30, 2010 and at
a price of $1,025 per debenture after June 30, 2010 and before the maturity
date. Upon maturity or redemption of the debentures, the Trust may, subject to
notice and regulatory approval, pay the outstanding principal and premium (if
any) on the debentures in cash or through the issue of additional Trust units
at 95% of the weighted average trading price of the Trust units.
    As at April 24, 2009, the Trust had outstanding a total of 4,113,131
incentive units exercisable at an average exercise price of $2.45 per unit,
294,026 exchangeable shares (convertible, as at April 24, 2009 into an
aggregate of 312,467 Trust units, subject to further adjustments based on
distributions made on Trust units), $86.25 million principal amount of
debentures convertible into trust units (at a conversion price of $16.00 per
Trust unit) and 78,496,581 Trust units.

    Commitments

    Off-Balance Sheet Arrangements

    The Trust has certain lease agreements, including primarily office space
leases, which were entered into in the normal course of operations. All leases
have been treated as operating leases whereby the lease payments are included
in operating expenses or G&A expenses depending on the nature of the lease. No
asset or liability value has been assigned to these leases in the balance
sheet as of March 31, 2009.

    Business Prospects and 2009 Year Outlook

    The Trust continues to develop its core assets and conduct some
exploration programs utilizing its large inventory of geological prospects. In
addition, the Trust will continue to explore potential acquisition
opportunities. Currently, the Trust's producing properties are located in
Saskatchewan, Alberta and British Columbia.
    The Trust continues to maintain a large undeveloped land base of
approximately 554,000 (358,000 net) acres containing a significant multi-year
drilling inventory.
    True continues to monitor its cost structure in the current economically
challenging climate and as a result, completed G&A reductions in January 2009.
True streamlined its operations and reduced head office staffing levels by one
third compared to 2008 levels. True's capital program for 2009 remains at $15
million as well as forecasted production volumes of 10,000 boe/d.
    As an added layer of protection of its cash flow forecast, True has
hedged approximately 56% of its estimated natural gas production for the
second through fourth quarter of 2009 at a combined fixed price of $6.42 CAD
per GJ ($7.06/mcf). Approximately 18% of True's estimated natural gas
production is hedged for the first half of 2010 at an average price of $7.25
CAD per GJ ($7.96/mcf). For the period of March 1, 2009 to December 31, 2009,
True has entered into a crude oil collar to effectively hedge approximately
13% of its estimated 2009 crude oil production with a floor price of CAD
$52.30/bbl and a ceiling price of CAD $80.70/bbl.
    True's operating forecast for 2009 which assumes a CAD$/US$ exchange rate
of $0.82, WTI oil price ranging from US$50.00/bbl to US$55.00/bbl, AECO
natural gas price ranging from CAD$5.46/GJ ($6.00/mcf) to CAD$5.92/GJ
($6.50/mcf) and average annual production of approximately 10,000 boe/d
generates cash flow from operations ranging from $30 million to $40 million,
after deducting royalties, all operating costs (as reduced as discussed
herein), G&A and debt servicing costs. Based on the foregoing assumptions and
assuming 2009 distributions of $1.6 million coupled with the planned capital
budget of $15 million the Trust would utilize between approximately 40% - 60%
of the Trust's forecasted cash flow from operations.
    True's 2009 capital program is not expected to exceed $15 million and
will limit the first half 2009 capital program to $3 to $4 million. Given the
nature of True's lands and their inherent advantage of year round access, True
currently plans to spread its 2009 capital program evenly through the full
year of 2009 to take advantage of reduced service costs during non-peak times.
True will focus on increasing its farm-out activity in non-core areas. If the
2009 outlook for commodity prices improves, True would plan to increase its
capital spending in third and fourth quarters of 2009 dependant upon cash
flow.
    On April 23, 2009 True announced that its lenders have completed their
review of its borrowing base and that True has received an extension of its
credit facility until June 30, 2010 at which time the facility is repayable,
unless extended by unanimous consent of the lenders. Effective April 1, 2009,
the amount of the renewed credit facility is $140 million, a decrease of $12
million from the expiring facility.

    Financial Reporting Update

    Goodwill and intangible assets

    In February 2008, the CICA issued a new accounting standard, Section 3064
- Goodwill and Intangible Assets, which replaces Section 3062 - Goodwill and
Other Intangible Assets, and Section 3450 - Research and Development costs.
The new section establishes standards for the recognition, measurement and
disclosure of goodwill and intangible assets. The section is effective for the
Trust beginning January 1, 2009. Application of the new section does not
currently have any impact on the Trust's financial statements.

    International Financial Reporting Standards ("IFRS")

    On February 13, 2008 the CICA Accounting Standards Board announced that
Canadian public reporting issuers will be required to report under
International Financial Reporting Standards ("IFRS"), which will replace
Canadian generally accepted accounting principles ("GAAP") for years beginning
on or after January 1, 2011. The transition date of January 1, 2011 will
require restatement for comparative purposes, of amounts reported by the Trust
for its year ended December 31, 2010, and of the opening balance sheet as at
January 1, 2010. An internal project team has been set up to manage this
transition and to ensure successful implementation within the required time
frame. Current economic conditions may require re-allocation of resources
available for the IFRS conversion project. The Trust has completed a high
level analysis to determine the areas impacted by the conversion and is
assessing the financial reporting impacts on the adoption of IFRS and, at this
time, the impact on future financial position and results of operations has
not yet been determined. True is also monitoring industry discussion regarding
the replacement of the CICA's Accounting Guideline 16, which is expected to
have major implications for True's current full cost accounting policies. The
Trust anticipates a significant increase in disclosures resulting from the
adoption of IFRS and is continuing to assess the level of this disclosure
required and any necessary systems changes to gather and process the
information. We will continue to monitor any changes in the adoption of IFRS
and will update plans as necessary.

    Business Risks and Uncertainties

    The reader is advised that True continues to be subject to various types
of business risks and uncertainties as described in the Management, Discussion
and Analysis for the year ended December 31, 2008 and the Trust's Annual
Information Form for the year ended December 31, 2008.

    Critical Accounting Estimates

    The reader is advised that the critical accounting estimates, policies,
and practices as described in the Trust's Management's Discussion and Analysis
for the year ended December 31, 2008 continue to be critical in determining
True's unaudited financial results as at March 31, 2009. There were no changes
in accounting policies for the three month period ended March 31, 2009, except
for the adoption of a new accounting standard, Section 3064 - Goodwill and
Intangible Assets, which does not have any impact on the Trust's financial
statements.

    Legal, Environmental Remediation and Other Contingent Matters

    The Trust reviews legal, environmental remediation and other contingent
matters to both determine whether a loss is probable based on judgment and
interpretation of laws and regulations and determine that the loss can
reasonably be estimated. When the loss is determined, it is charged to
earnings. The Trust's management monitor known and potential contingent
matters and make appropriate provisions by charges to earnings when warranted
by the circumstances.

    Controls and Procedures

    Disclosure Controls and Procedures

    The Trust's Chief Executive Officer and Chief Financial Officer have
designed, or caused to be designed under their supervision, disclosure
controls and procedures to provide reasonable assurance that: (i) material
information relating to the Trust is made known to the Trust's Chief Executive
Officer and Chief Financial Officer by others, particularly during the period
in which the annual and interim filings are being prepared; and (ii)
information required to be disclosed by the Trust in its annual filings,
interim filings or other reports filed or submitted by it under securities
legislation is recorded, processed, summarized and reported within the time
period specified in securities legislation.

    Internal Control over Financial Reporting

    The Trust's Chief Executive Officer and Chief Financial Officer have
designed, or caused to be designed under their supervision, internal control
over financial reporting to provide reasonable assurance regarding the
reliability of the Trust's financial reporting and the preparation of
financial statements for external purposes in accordance with the Canadian
GAAP.
    The Trust is required to disclose herein any change in the Trust's
internal control over financial reporting that occurred during the period
beginning on January 1, 2009 and ended on March 31, 2009 that has materially
affected, or is reasonably likely to materially affect, the Trust's internal
control over financial reporting. No material changes in the Trust's internal
control over financial reporting were identified during such period, that has
materially affected, or are reasonably likely to materially affect, the
Trust's internal control over financial reporting.
    It should be noted that a control system, including the Trust's
disclosure and internal controls and procedures, no matter how well conceived,
can provide only reasonable, but not absolute, assurance that the objectives
of the control system will be met and it should not be expected that the
disclosure and internal controls and procedures will prevent all errors or
fraud.

    Standardized Distributable Cash

    The Canadian Securities Administrators revised and re-issued in July 2007
National Policy 41-201 "Income Trusts and Other Indirect Offerings", which
includes disclosures regarding distributable cash for Income Trusts. Further,
the Canadian Institute of Chartered Accountants ("CICA") issued the
Interpretive Release "Standardized Distributable Cash in Income Trusts and
Other Flow-Through Entities: Guidance on Preparation and Disclosure" (the
"Release"). In this guidance, sustainability concepts are discussed and
standardized distributable cash is defined as cash flow from operating
activities less adjustments for productive capacity maintenance, long-term
unfunded contractual obligations and the effect of any foreseeable financing
matters, related to debt covenants, which could impair True's ability to pay
distributions or maintain productive capacity. This Management Discussion and
Analysis is in all material respects in accordance with the recommendations
provided in CICA's Release and NP 41-201.

    
    -------------------------------------------------------------------------
                                                 Three months ended March 31,
    ($000s, except per unit amounts and ratios)             2009        2008
    -------------------------------------------------------------------------

    Net loss                                              (9,056)    (18,621)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash flow from operating activities                    9,311      17,843
    Productive capacity maintenance(1)                    (2,528)     (8,453)
    -------------------------------------------------------------------------
    Standardized distributable cash                        6,783       9,390
    Proceeds on sale of property, plant and equipment         (8)      5,788
    Corporate and property acquisition
     and other capital expenditures                         (228)       (197)
    Bank borrowings (debt repayment) and
     working capital changes and other                    (4,977)     (5,474)
    -------------------------------------------------------------------------
    Cash Distributions declared                            1,570       9,507
    Accumulated distributions, beginning of period       251,501     215,167
    -------------------------------------------------------------------------
    Accumulated distributions, end of period             253,071     224,674
    -------------------------------------------------------------------------
    Standardized distributable cash
     per unit - basic                                 $     0.09  $     0.12
    Standardized distributable cash
     per unit - diluted                               $     0.09  $     0.12
    -------------------------------------------------------------------------
    Standardized distributable cash payout ratio(2)         0.23        1.01
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Distributions declared per unit for outstanding
     units in the period                              $     0.02  $     0.12
    Accumulated distributions per unit,
     beginning of period                                    4.54        4.08
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Accumulated distributions per unit, end of period $     4.56  $     4.20
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Excess (shortfall) of net income over cash
     distributions declared                              (10,626)    (28,128)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Excess of cash flow from operating activities
     over cash distributions declared                      7,741       8,336
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Please refer to the discussion of productive capacity maintenance
        below
    (2) Represents cash distributions declared divided by standardized
        distributable cash
    

    True strives to fund both distributions (if any) and maintenance capital
primarily from funds flow from operations.
    Productive capacity is the amount of capital funds required in a period
for an enterprise to maintain its ability to generate future cash flow from
operating activities at a constant level. As commodity prices can be volatile
and short-term variations in production levels are often experienced in the
oil and gas industry, True defines production capacity as production on a
barrel of oil equivalent basis. A quantifiable measure for these short-term
variations is not objectively determinable or verifiable due to various
factors including the inability to distinguish natural production declines
from the effect of production additions resulting from capital and
optimization programs, and the effect of temporary production interruptions.
As a result, the adjustment for productive capacity maintenance in True's
calculation of standardized distributable cash is True's capital expenditures
excluding the cost of any asset acquisition, corporate asset acquisitions or
proceeds of any asset disposition. True believes that its capital programs
based on 40% to 60% of forecasted funds flow including its current view of
True's assets and opportunities and True's outlook for commodity prices and
industry conditions in the medium term, should be sufficient to maintain
True's productive capacity in the medium term. True sets its hurdle rates for
evaluating potential development and optimization projects according to these
parameters. Due to the risks inherent in the oil and natural gas industry,
particularly True's exploration and development activities and inherent
variations in commodity prices, there can be no assurance that capital
programs, whether limited to excess of cash flow over distributions or not,
will be sufficient to maintain or increase True's production levels or cash
flow from operating activities. True's capital expenditures and production can
be impacted by the timing of the capital program and spring break up
associated with certain operating areas of its properties. As True strives to
maintain sufficient credit facilities and appropriate levels of bank debt,
this seasonality is not expected to influence True's distribution policies.
    True's calculation of standardized distributable cash has no adjustment
for long-term unfunded contractual obligations. True's only material long-term
unfunded contractual obligation at this time is for asset retirement
obligations. True's abandonment obligations are being funded on an annual
basis with cash flow from operating activities. Cash flow from operating
activities, used in our standardized distributable cash calculation, includes
a deduction for abandonment expenditures incurred in the year. True regularly
monitors its current forecast debt levels to ensure debt covenants are not
exceeded.
    Distributions, if paid, typically exceed net income as a result of
non-cash items such as unit-based compensation, depletion, depreciation and
accretion, unrealized loss (gain) on commodity contracts, and future income
tax expense (recovery). These non-cash items generally result in a reduction
to net income, with no impact to cash flow from operating activities.
Therefore, distributions, if paid, will exceed net income in most periods. In
the event distributions exceed cash flow from operating activities and the
requirements of True's capital program, the shortfall would typically be
funded by a combination of available bank facilities, equity or debt issues,
or the sale proceeds from non-core assets.
    The Board of Directors and management regularly review the level of
distributions. The board considers a number of factors, including expectations
of future current commodity prices, hedge positions, production volumes,
capital expenditure requirements, market conditions, the availability of debt
and equity capital and other factors. As announced on March 17, 2009, as a
result of the continued deterioration in economic conditions, including the
significant decline in crude oil and natural gas prices and heightened risk in
the credit markets, the Trust has suspended its distributions until further
notice. Pursuant to True's credit facility, distributions to unitholders
(other than by way of the issuance of Trust units) require the approval of
True's lenders if the funds to pay such distributions are received from True
Energy.

    
    -------------------------------------------------------------------------
    ($000s, except ratios)                                 To March 31, 2009
    -------------------------------------------------------------------------
    Cumulative distributable cash from operations(1)                  73,216
    Proceeds on sale of property, plant and equipment                100,654
    Corporate and property acquisitions and other
     capital expenditures                                            (26,414)
    Net proceeds from issue of trust units                            54,375
    Proceeds from issue of convertible debentures,
     net of issue costs                                               82,261
    Repurchase of trust units under normal course
     issuer bid                                                       (4,194)
    Funding from DRIP                                                 42,909
    Bank borrowings (debt repayment) and working
     capital changes and other                                       (69,736)
    -------------------------------------------------------------------------
    Cumulative cash distributions declared(1)                        253,071
    -------------------------------------------------------------------------
    Standardized distributable cash payout ratio(2)                     3.46
    -------------------------------------------------------------------------
    (1) Subsequent to the November 2, 2005 reverse takeover of TKE Energy
        Trust
    (2) Represents cumulative distributions declared divided by cumulative
        standardized distributable cash
    

    Sensitivity Analysis

    The table below shows sensitivities to funds flow as a result of product
price and operational changes. This is based on actual average prices received
for the first quarter of 2009 and average production volumes of 9,981 boe/d
during that period, as well as the same level of debt outstanding at March 31,
2009. Diluted weighted average Trust units is based upon the first quarter of
2009. These sensitivities are approximations only, and not necessarily valid
under other significantly different production levels or product mixes.
Hedging activities can significantly affect these sensitivities. Changes in
any of these parameters will affect funds flow as shown in the table below:

    
    -------------------------------------------------------------------------
                                                                  Funds Flow
                                                      Funds Flow        from
                                                            from  Operations
                                                      Operations Per Diluted
                                                     (annualized)       Unit
    -------------------------------------------------------------------------
    Sensitivity Analysis                                  ($000s)         ($)
    -------------------------------------------------------------------------
    Change of US $1/bbl WTI                                1,300        0.02
    Change of $0.10/ mcf                                   1,100        0.01
    Change of US $0.01 Cdn/ US exchange rate                 500           -
    Change in prime of 1%                                  1,300        0.02
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Selected Quarterly Consolidated Information

    The following table sets forth selected consolidated financial information
of the Trust for the most recently completed quarters ending at March 31,
2009.

    -------------------------------------------------------------------------
    2009 - Quarter ended
     (unaudited)
    ($000s, except per
     unit amounts)              March 31
    -------------------------------------------------------------------------
    Revenues before royalties
     and hedging                  31,345
    Funds flow from
     operations(1)                 6,489
    Funds flow from operations
     per unit(1)
      Basic                   $     0.08
      Diluted                 $     0.08
    Net income (loss)             (9,056)
    Net income (loss) per unit
      Basic                   $    (0.12)
      Diluted                 $    (0.12)
    Net capital expenditures
     (cash)                        2,764
    Distributions declared         1,570
    Distributions per unit    $     0.02
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    2008 - Quarter ended
     (unaudited)
    ($000s, except per
     unit amounts)              March 31     June 30    Sept. 30     Dec. 31
    -------------------------------------------------------------------------
    Revenues before royalties
     and hedging                  70,033      82,074      72,225      41,053
    Funds flow from
     operations(1)                24,233      26,304      21,491       5,865
    Funds flow from operations
     per unit(1)
      Basic                   $     0.31  $     0.33  $     0.27  $     0.07
      Diluted                 $     0.30  $     0.33  $     0.27  $     0.07
    Net income (loss)            (18,621)    (21,374)     29,939      (9,534)
    Net income (loss) per unit
      Basic                   $    (0.24) $    (0.27) $     0.38  $    (0.12)
      Diluted                 $    (0.24) $    (0.27) $     0.38  $    (0.12)
    Net capital expenditures
     (cash)                        2,862     (34,450)     13,779      16,471
    Distributions declared         9,507       9,505       9,474       7,848
    Distributions per unit    $     0.12  $     0.12  $     0.12  $     0.10
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    2007 - Quarter ended
     (unaudited)
    ($000s, except per
     unit amounts)              March 31     June 30    Sept. 30     Dec. 31
    -------------------------------------------------------------------------
    Revenues before royalties
     and hedging                  71,196      74,991      50,547      61,756
    Funds flow from
     operations(1)                29,988      34,192      17,478      19,514
    Funds flow from operations
     per unit(1)
      Basic                   $     0.43  $     0.47  $     0.22  $     0.25
      Diluted                 $     0.42  $     0.45  $     0.22  $     0.25
    Net income (loss)             (8,571)      1,741     (17,003)       (434)
    Net income (loss) per unit
      Basic                   $    (0.12) $     0.02  $    (0.21) $    (0.01)
      Diluted                 $    (0.12) $     0.02  $    (0.21) $    (0.01)
    Net capital expenditures
     (cash)                       27,915       6,739       7,562      14,828
    Distributions declared        16,866      18,376      19,132      19,077
    Distributions per unit    $     0.24  $     0.24  $     0.24  $     0.24
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" in respect of the term "funds flow from
        operations" and "funds flow from operations per unit".



    TRUE ENERGY TRUST
    CONSOLIDATED BALANCE SHEETS
    As at March 31 and December 31 (unaudited)
    -------------------------------------------------------------------------

    ($000s)                                                 2009        2008
    -------------------------------------------------------------------------
    ASSETS
    Current assets
      Accounts receivable                             $   25,574  $   28,119
      Marketable securities (note 4)                         250         120
      Deposits and prepaid expenses                        6,067       5,969
      Commodity contract asset (note 15)                  11,842       3,726
                                                     ------------------------
                                                          43,733      37,934
    Property, plant and equipment (note 5)               674,980     698,183
                                                     ------------------------
    Total assets                                      $  718,713  $  736,117
                                                     ------------------------
                                                     ------------------------

    LIABILITIES
    Current liabilities
      Accounts payable and accrued liabilities        $   32,600  $   34,128
      Distribution payable to unitholders                      -       1,570
      Commodity contract liability  (note 15)                272           -
      Future income taxes (note 13)                        3,300       1,100
      Current portion of long-term debt (note 6)          16,922           -
                                                     ------------------------
                                                          53,094      36,798
    Long-term debt (note 6)                              114,700     132,388
    Convertible debentures (note 7)                       81,598      81,124
    Asset retirement obligations (note 8)                 34,197      33,682
    Future income taxes (note 13)                         36,897      42,777
                                                     ------------------------
    Total liabilities                                    320,486     326,769
                                                     ------------------------

    NON-CONTROLLING INTEREST
      Exchangeable shares of subsidiary (note 9)           2,851       2,887

    UNITHOLDERS' EQUITY
      Unitholders' capital (note 10)                     917,012     917,012
      Equity component of convertible debentures           5,119       5,119
      Contributed surplus (note 11)                       27,670      28,240

      Accumulated other comprehensive income                (509)       (620)
      Deficit                                           (553,916)   (543,290)
                                                     ------------------------
                                                        (554,425)   (543,910)
                                                     ------------------------

                                                     ------------------------
    Total unitholders' equity                            395,376     406,461
                                                     ------------------------
    Total liabilities and unitholders' equity         $  718,713  $  736,117
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    See accompanying selected notes to the consolidated financial statements.



    TRUE ENERGY TRUST
    CONSOLIDATED STATEMENTS OF LOSS  AND COMPREHENSIVE LOSS
    For the three months ended March 31 (unaudited)

    ($000s)                                                 2009        2008
    -------------------------------------------------------------------------
    REVENUES
      Petroleum and natural gas sales                 $   31,345  $   70,033
      Royalties                                           (6,308)    (15,500)
      Gain (loss) on commodity contracts (note 15)        10,475     (21,829)
                                                     ------------------------
                                                          35,512      32,704

    EXPENSES
      Production                                          13,946      16,996
      Transportation                                       1,563         843
      General and administrative                           2,842       3,770
      Interest and financing charges                       3,302       4,516
      Unit-based compensation (recovery)
       (notes 10 and 11)                                    (603)        269
      Depletion, depreciation and accretion               27,255      36,303
                                                     ------------------------
                                                          48,305      62,697

    LOSS BEFORE TAXES                                    (12,793)    (29,993)

    TAXES
      Capital taxes                                            -         463
      Future income tax recovery (note 13)                (3,701)    (11,754)
                                                     ------------------------
                                                          (3,701)    (11,291)

    NET LOSS BEFORE NON-CONTROLLING INTEREST              (9,092)    (18,702)
      Non-controlling interest                               (36)        (81)
                                                     ------------------------
                                                     ------------------------

    NET LOSS                                              (9,056)    (18,621)
                                                     ------------------------

    Unrealized gain on available for sale
     marketable securities (net of tax expense
     of $0.02 million) (note 4)                              111           -
                                                     ------------------------

    COMPREHENSIVE LOSS                                $   (8,945) $  (18,621)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net loss per trust unit
      Basic                                           $    (0.12) $    (0.24)
      Diluted                                         $    (0.12) $    (0.24)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    See accompanying selected notes to the consolidated financial statements.



    TRUE ENERGY TRUST
    CONSOLIDATED STATEMENTS OF UNITHOLDERS' EQUITY
    For the three months ended March 31 (unaudited)

    ($000s)                                                 2009        2008
    -------------------------------------------------------------------------

    UNITHOLDERS' CAPITAL
      Balance, beginning of period                    $  917,012  $  925,573
      Exchangeable shares converted                            -         162
                                                     ------------------------
      Balance, end of period                             917,012     925,735
                                                     ------------------------

    EQUITY COMPONENT OF CONVERTIBLE DEBENTURES       ------------------------
      Balance, beginning and end of period                 5,119       5,119
                                                     ------------------------

    CONTRIBUTED SURPLUS
      Balance, beginning of period                        28,240      19,454
      Unit-based compensation expense (note 10 and 11)       215         603
      Reversal of prior period unit-based
       compensation expense for forfeitures of
       unvested incentive units                             (785)       (185)
                                                     ------------------------
      Balance, end of period                              27,670      19,872
                                                     ------------------------

    DEFICIT
      Balance, beginning of period                      (543,290)   (487,366)
      Net loss                                            (9,056)    (18,621)
      Distributions declared                              (1,570)     (9,507)
                                                     ------------------------
      Balance, end of period                            (553,916)   (515,494)
                                                     ------------------------

    ACCUMULATED OTHER COMPREHENSIVE INCOME
      Balance, beginning of period                          (620)          -
      Unrealized gain on available for sale
       marketable securities (net of tax
       expense of $0.02 million) (note 4)                    111           -
                                                     ------------------------
      Balance, end of period                                (509)          -
                                                     ------------------------

    -------------------------------------------------------------------------
    TOTAL UNITHOLDERS' EQUITY                         $  395,376  $  435,232
    -------------------------------------------------------------------------
    See accompanying selected notes to the consolidated financial statements.


    TRUE ENERGY TRUST
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    For the three months ended March 31 (unaudited)

    ($000s)                                                 2009        2008
    -------------------------------------------------------------------------

    Cash provided by (used in):
    CASH FLOW FROM OPERATING ACTIVITIES
    Net loss                                          $   (9,056) $  (18,621)
    Items not involving cash:
      Non-controlling interest (note 9)                      (36)        (81)
      Depletion, depreciation and accretion               27,255      36,303
      Unit-based compensation (recovery)
       (notes 10 and 11)                                    (603)        269
      Unrealized loss (gain) on commodity contracts
       (note 15)                                          (7,844)     17,687
      Accretion on convertible debentures                    474         430
      Future income tax recovery (note 13)                (3,701)    (11,754)
                                                     ------------------------
                                                           6,489      24,233
      Asset retirement costs incurred (note 8)              (738)       (589)
      Change in non-cash working capital (note 12)         3,560      (5,801)
                                                     ------------------------
                                                           9,311      17,843

    CASH FLOW FROM (USED IN) FINANCING ACTIVITIES
      Increase (decrease) in bank debt                      (766)      3,375
      Distributions declared                              (1,570)     (9,507)
                                                     ------------------------
                                                          (2,336)     (6,132)
      Change in non-cash working capital (note 12)        (1,518)     (3,160)
                                                     ------------------------
                                                          (3,854)     (9,292)

    CASH FLOW FROM (USED IN) INVESTING ACTIVITIES
      Additions to property, plant and equipment          (2,756)     (8,650)
      Proceeds on sale of property, plant
       and equipment                                          (8)      5,788
                                                     ------------------------
                                                          (2,764)     (2,862)
      Change in non-cash working capital (note 12)        (2,693)     (5,689)
                                                     ------------------------
                                                          (5,457)     (8,551)

      Change in cash                                           -           -

      Cash, beginning of period                                -           -
    -------------------------------------------------------------------------

      Cash, end of period                             $        -  $        -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    See accompanying selected notes to the consolidated financial statements.



    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
    (unaudited)
    -------------------------------------------------------------------------

    1.  STRUCTURE OF THE TRUST

        True Energy Trust ("True" or the "Trust") is an open-ended,
        unincorporated investment trust governed by the laws of the Province
        of Alberta.

        The purpose of the Trust is to indirectly explore for, develop and
        hold interests in petroleum and natural gas properties, through
        investments in securities of subsidiaries and net profits interests
        in oil and natural gas properties. The business of the Trust is
        carried on by True Energy Inc. and its indirect wholly owned
        subsidiary True Energy Peru S.A.C. The Trust owns, directly and
        indirectly, 100% of the common shares, (excluding the exchangeable
        shares - see note 9) of True Energy Inc. and True Energy Peru S.A.C.
        The activities of True Energy Inc. are financed through interest
        bearing notes from the Trust and third party debt.

    2.  SIGNIFICANT ACCOUNTING POLICIES

        The interim consolidated financial statements of the Trust have been
        prepared by management in accordance with generally accepted
        accounting policies in Canada. The unaudited interim consolidated
        financial statements have been prepared following the same accounting
        policies and methods of computation as the consolidated financial
        statements for the fiscal year ended December 31, 2008, except as
        described in note 3. The interim consolidated financial statement
        note disclosures do not include all of those required by Canadian
        generally accepted accounting principles ("GAAP") applicable for
        annual financial statements. Accordingly, the interim consolidated
        financial statements should be read in conjunction with the
        consolidated financial statements and the notes thereto as at and for
        the year ended December 31, 2008.

        Certain prior period comparative figures have been restated to
        conform to the current year's presentation.

    3.  RECENT ACCOUNTING PRONOUNCEMENTS

        Effective January 1, 2009, the Trust adopted the following new
        accounting standard:

           Goodwill and intangible assets

           The CICA issued a new accounting standard, Section 3064 - Goodwill
           and Intangible Assets, which replaces Section 3062 - Goodwill and
           Other Intangible Assets, and Section 3450 - Research and
           Development costs. The new section establishes standards for the
           recognition, measurement and disclosure of goodwill and intangible
           assets. Application of the new section does not have any impact on
           the Trust's financial statements.

        International Financial Reporting Standards ("IFRS")

        On February 13, 2008 the CICA Accounting Standards Board announced
        that Canadian public reporting issuers will be required to report
        under International Financial Reporting Standards ("IFRS"), which
        will replace Canadian generally accepted accounting principles for
        years beginning on or after January 1, 2011. Currently, we are
        assessing the effects of adoption and developing a plan accordingly.
        We will continue to monitor any changes in the adoption of IFRS and
        will update plans as necessary.

    4.  MARKETABLE SECURITIES

        The Trust's investment in Veraz Petroleum Ltd. Is classified as
        available-for-sale and has been recorded at fair value. Changes in
        the fair value of the marketable securities are recorded net of the
        income tax effect to other comprehensive income.

    5.  PROPERTY, PLANT AND EQUIPMENT

        ($000s)
        ---------------------------------------------------------------------
                                                   Accumulated
                                                 depletion and      Net book
        March 31, 2009                      Cost  depreciation         value
        ---------------------------------------------------------------------
        Petroleum and natural
         gas properties              $ 1,378,682   $   705,686   $   672,996
        Office furniture and
         equipment                         3,994         2,010         1,984
        ---------------------------------------------------------------------
                                     $ 1,382,676   $   707,696   $   674,980
        ---------------------------------------------------------------------

        December 31, 2008
        ---------------------------------------------------------------------
        Petroleum and natural
         gas properties              $ 1,375,331   $   679,196   $   696,135
        Office furniture and
         equipment                         3,955         1,907         2,048
        ---------------------------------------------------------------------
                                     $ 1,379,286   $   681,103   $   698,183
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The Trust has included $62.7 million (March 31, 2008: $54.2 million)
        for future development costs and excluded $28.2 million (March 31,
        2008: $35.2 million) for undeveloped land and $42.6 million
        (March 31, 2008: $45.9 million) for estimated salvage from the
        depletion calculation during the three month period ended March 31,
        2009.

        For the three month period ended March 31, 2009, the Trust
        capitalized $0.1 million of general and administrative expenses and
        $0.03 million of unit-based compensation expense directly related to
        exploration activities.

    6.  LONG-TERM DEBT
        ---------------------------------------------------------------------
                                                       March 31, December 31,
                                                           2009         2008
        ---------------------------------------------------------------------
        ($000s)
        ---------------------------------------------------------------------

        Operating facility                           $    1,622   $    7,388
        Revolving term facility                         130,000      125,000
        ---------------------------------------------------------------------
                                                     $  131,622   $  132,388
        Less: Current portion                            16,922            -
        ---------------------------------------------------------------------
        Balance, end of period                       $  114,700   $  132,388
        ---------------------------------------------------------------------

        The credit facility was renewed effective April 1, 2009 and was
        renewed at $140 million, a decrease of $12 million from the expiring
        facility. The renewed facility consists of a $13.8 million demand
        operating facility provided by one Canadian bank and a $126.2 million
        extendible revolving term credit facility syndicated by two Canadian
        chartered banks, a Canadian financial institution, one institutional
        lender and a U.S. bank. The revolving credit facility matures on
        June 30, 2010 and an extension of the facility will require unanimous
        consent of the lenders. Amounts borrowed under the credit facility
        bear interest at a floating rate based on the applicable Canadian
        prime rate, U.S. base rates, LIBOR rates, plus between 2.00% and
        5.75%, depending on the types of borrowings and the Trust's debt to
        cash flow ratio. Security is provided by a $400 million debenture
        containing a first ranking security interest on all of the Trust's
        assets. The credit facility is secured against all the assets of True
        Energy Inc., the Trust and all material subsidiaries. True has
        provided a negative pledge and undertaking to provide fixed charges
        over major petroleum and natural gas reserves in certain
        circumstances. A standby fee is charged on between 0.750% and 1.45%
        on the undrawn portion of the facility, depending on the Trust's debt
        to cash flow ratio. Pursuant to True's credit facility, distributions
        to unitholders (other than by way of the issuance of Trust units)
        require the approval of True's lenders if the funds to pay such
        distributions are received from True Energy Inc.

        As at March 31, 2009, approximately $8.4 million was not drawn under
        the renewed facility to assist in managing our operations and capital
        program. True is fully compliant with all of its debt covenants.

        The revolving term credit facility matures on June 30, 2010, and an
        extension of the facility will require unanimous consent of the
        lenders. The borrowing base was renewed effective April 1, 2009 and
        is subject to review on June 29, 2009 with the next scheduled semi
        annual review thereafter to be completed on September 30, 2009 and
        the borrowing base may be adjusted on these dates. The borrowing base
        will be subject to the lending syndicate's determination which is
        based upon the latest reserves information, their internal commodity
        price decks and other factors. In the event the borrowing base is
        lowered below the drawn credit facility at that time, any shortfall
        would be required to be repaid within 60 days of notification, or as
        otherwise agreed by the lending syndicate, and this funding would
        currently be expected to come from alternative sources of debt or
        equity financing or the proceeds from asset dispositions as
        available.

        $11.5 million of the syndicated facility is with a US bank which must
        be repaid or reallocated to one or more of the other four current
        members of the syndicate or a new member on June 29, 2009, if not
        renewed by the US bank.

        Current maturities on long-term debt as of March 31, 2009 are
        comprised of the operating facility repayments expected under the
        renewed facility and the $11.5 million of the syndicated facility
        owing to the US bank.

    7.  CONVERTIBLE DEBENTURES

        The following table shows the convertible debenture activities for
        the three month period ended March 31, 2009 and the year ended
        December 31, 2008:

        ---------------------------------------------------------------------
                                                          Debt        Equity
                                       Number of     Component     Component
                                      Debentures        ($000s)       ($000s)
        ---------------------------------------------------------------------
        Balance, December 31, 2007        86,250   $    79,407   $     5,119
        Accretion                              -         1,717             -
        ---------------------------------------------------------------------
        Balance, December 31, 2008        86,250   $    81,124   $     5,119
        ---------------------------------------------------------------------
        Accretion                              -           474             -
        ---------------------------------------------------------------------
        Balance, March 31, 2009           86,250        81,598   $     5,119
        ---------------------------------------------------------------------

        In November 2008, the Trust received Toronto Stock Exchange approval
        for its normal course issuer bid program ("NCIB") to repurchase up to
        10% of the issued and outstanding 7.50% convertible unsecured
        subordinated debentures of the Trust from December 1, 2008 to
        November 30, 2009. As of March 31, 2009 there have been no
        repurchases of convertible debentures under the NCIB. Commencing
        April 1, 2009, repurchase of convertible debentures requires the
        consent of the lenders of the long-term debt.

    8.  ASSET RETIREMENT OBLIGATIONS

        The Trust's asset retirement obligations result from net ownership
        interests in petroleum and natural gas assets including well sites,
        gathering systems and processing facilities. The Trust estimates the
        total undiscounted amount of cash flows required to settle its asset
        retirement obligations is approximately $77.5 million which will be
        incurred between 2009 and 2053. A credit-adjusted risk-free rate of
        8 percent and an inflation rate of 2.4 percent were used to calculate
        the fair value of the asset retirement obligation.

        ---------------------------------------------------------------------
                                                       March 31, December 31,
        ($000s)                                            2009         2008
        ---------------------------------------------------------------------
        Balance, beginning of period                 $   33,682   $   28,373
        Liabilities incurred on development activities       30          784
        Changes in prior period estimates                   772        8,302
        Liabilities released on dispositions               (211)      (3,333)
        Liabilities settled during the period              (738)      (2,603)
        Accretion expense                                   662        2,159
        ---------------------------------------------------------------------
        Balance, end of period                       $   34,197   $   33,682
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    9.  EXCHANGEABLE SHARES OF SUBSIDIARY / NON-CONTROLLING INTEREST

        ---------------------------------------------------------------------
                                    March 31, 2009         December 31, 2008
                                              Amount                  Amount
                                  Number      ($000s)     Number      ($000s)
        ---------------------------------------------------------------------
        Balance, beginning
         of period               294,026  $    2,887     390,276  $    3,922
        Non-controlling
         interest recovery             -         (36)          -         (83)
        Exchanged for trust
         units                         -           -     (96,250)       (952)
        ---------------------------------------------------------------------
        Balance, end of
         period                  294,026  $    2,851     294,026  $    2,887
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The exchange ratio is calculated monthly based on the five day
        weighted average trust unit trading price preceding the monthly
        effective date. The exchangeable shares are not eligible for cash
        distributions; however cash distributions will increase the exchange
        ratio. As at March 31, 2009, the exchange ratio was 1.0627 (2008:
        1.0218).

    10. UNITHOLDERS' CAPITAL

        a. Trust Units

        ---------------------------------------------------------------------
                                    March 31, 2009         December 31, 2008
                                              Amount                  Amount
                                  Number      ($000s)     Number      ($000s)
        ---------------------------------------------------------------------
        Balance, beginning
         of period            78,496,581  $  917,012  79,216,046  $  925,573
        Repurchased under
         normal course
         issuer bid                    -           -    (814,300)     (9,513)
        Exchangeable shares
         converted                     -           -      94,835         952
        ---------------------------------------------------------------------
        Balance, end of
         period               78,496,581  $  917,012  78,496,581  $  917,012
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        In August 2008, the Trust announced approval of the renewal of its
        normal course issuer bid ("NCIB") program to repurchase up to
        7.8 million of its outstanding trust units during the period
        August 28, 2008 through August 27, 2009, subject to certain
        restrictions. As of March 31, 2009, the Trust has purchased 615,100
        trust units at a weighted average price of $2.74 per trust unit under
        the NCIB renewed on August 28, 2008. No repurchases have taken place
        in the three month period ended March 31, 2009. Commencing April 1,
        2009, repurchase of trust units requires the consent of the lenders
        of the long-term debt.

        b. Trust Unit Incentive Plan

        The following tables summarize information regarding trust unit
        incentive rights for the three month period ended March 31, 2009:

        Unit Rights Continuity
        ---------------------------------------------------------------------
                                                       Weighted
                                                        Average
                                                       Exercise
                                                        Price(a)      Number
        ---------------------------------------------------------------------
        Balance, December 31, 2008                   $     3.97    2,700,500
        Granted                                      $     1.51    2,346,800
        Forfeited                                    $     4.43     (929,168)
        ---------------------------------------------------------------------
        Balance, March 31, 2009                      $     2.45    4,118,132
        ---------------------------------------------------------------------
        (a) Exercise prices reflect grant prices less reduction in exercise
            prices.

        Unit Rights Outstanding, March 31, 2009
        ---------------------------------------------------------------------
                                            Outstanding
                                                        Weighted
                                                         Average
                                                        Exercise    Weighted
                                                           Price     Average
        Exercise           Exercise Price         At      Net of   Remaining
        Price Before               Net of   March 31,      Price Contractual
        Price Reductions       Reductions       2009  Reductions        Life
        ---------------------------------------------------------------------
        $ 0.65 - $ 1.50   $ 0.65 - $ 1.50  1,207,882      $ 1.11         5.0
        $ 1.68 - $ 2.92   $ 1.64 - $ 2.47  1,967,751      $ 2.05         4.6
        $ 3.02 - $ 4.55   $ 2.58 - $ 4.29    227,000      $ 3.60         4.2
        $ 4.98 - $ 6.70   $ 4.23 - $ 5.57    690,499      $ 5.03         3.1
        $20.40 - $20.40   $16.95 - $16.95     25,000      $16.95         1.7
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
        $ 0.65 - $20.40   $ 0.65 - $16.95  4,118,132      $ 2.45         4.4
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        -----------------------------------------
                               Exercisable
                                        Exercise
                                           Price
        Exercise                  At      Net of
        Price Before        March 31,      Price
        Price Reductions        2009  Reductions
        -----------------------------------------
        $ 0.65 - $ 1.50            -           -
        $ 1.68 - $ 2.92      197,152      $ 2.47
        $ 3.02 - $ 4.55       15,000      $ 2.58
        $ 4.98 - $ 6.70      245,152      $ 5.02
        $20.40 - $20.40       25,000      $16.95
        -----------------------------------------
        -----------------------------------------
        $ 0.65 - $20.40      482,304      $ 4.52
        -----------------------------------------
        -----------------------------------------

        c. Employee Trust Unit Savings Plan

        Effective October 1, 2006, the Trust introduced an employee trust
        unit savings plan for the benefit of all employees. Under the savings
        plan, employees may elect to contribute up to 10 percent of their
        salary and contributions are used to fund the acquisition of trust
        units. The Trust matches employee contributions at a rate of $1.00
        for each $1.00 contributed. Trust units are purchased in the open
        market by the plan administrator, an investment firm, on behalf of
        the participants in the plan. For the three month period ended
        March 31, 2009, the Trust matched $0.1 million (2008 - $0.1 million)
        under the plan. Effective for March 2009, the Trust suspended
        matching contributions under the plan until further notice.

    11. CONTRIBUTED SURPLUS

        ---------------------------------------------------------------------
                                                       March 31, December 31,
        ($000s)                                            2009         2008
        ---------------------------------------------------------------------
        Balance, beginning of period                 $   28,240   $   19,454
        Unit-based compensation expense                     215        1,869
        Incentive units voluntarily surrendered               -          466
        Reversal of prior period unit-based
         compensation expense for forfeitures of
         unvested incentive units                          (785)        (526)
        Adjustment for repurchase of units under NCIB         -        6,977
        ---------------------------------------------------------------------
        Balance, end of period                       $   27,670   $   28,240
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Unit-based Compensation Expense

        During the three months ended March 31, 2009, the Trust granted
        2,346,800 unit incentive rights to employees, directors and officers.
        Of the 2,346,800 unit incentive rights granted during the period,
        1,921,186 unit incentive rights have an exercise price that is higher
        than the Trust's unit market price on the grant date. The unit
        incentive rights for which the exercise price is higher than the
        Trust's unit market price on the grant date have a weighted average
        fair value of $0.24 per unit and an average exercise price of $1.69.
        The remaining unit incentive rights have a weighted average fair
        value of $0.38 per unit. During the three month period ended
        March 31, 2009, the Trust recorded unit-based compensation of
        $0.2 million, of which $0.03 million was capitalized to property,
        plant and equipment.

        The fair values of all incentive rights granted are estimated on the
        date of grant using the Black-Scholes option-pricing model. The
        weighted average fair market value of incentive rights granted during
        the three month period ended March 31, 2009 and the assumptions used
        in their determination are as noted below:

        ---------------------------------------------------------------------
                                                                        2009
        ---------------------------------------------------------------------
        Assumptions:
          Risk free interest rate (%)                                      2
          Expected life (years)                                            5
          Expected volatility (%)                                         69
        ---------------------------------------------------------------------
        Results:
          Weighted average fair value of each incentive
           right granted                                          $     0.26
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    12. SUPPLEMENTAL CASH FLOW INFORMATION

        Cash Interest and Taxes Paid
        ---------------------------------------------------------------------
                                                 Three months ended March 31,
        ($000s)                                             2009        2008
        ---------------------------------------------------------------------
        Cash paid:
          Interest                                    $      894  $    2,505
          Taxes (net of refunds)                      $     (274) $      285
        ---------------------------------------------------------------------

        Change in Non-cash Working Capital
        ---------------------------------------------------------------------
                                                 Three months ended March 31,
        ($000s)                                             2009        2008
        ---------------------------------------------------------------------
        Changes in non-cash working capital items:
          Accounts receivable                         $    2,545  $   (9,174)
          Deposits and prepaid expenses                      (98)       (381)
          Accounts payable and accrued liabilities        (1,528)     (1,927)
          Distribution payable to unitholders             (1,570)     (3,168)
        ---------------------------------------------------------------------
                                                      $     (651) $  (14,650)
        ---------------------------------------------------------------------
        Changes related to:
          Operating activities                        $    3,560  $   (5,801)
          Financing activities                            (1,518)     (3,160)
          Investing activities                            (2,693)     (5,689)
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
                                                      $     (651) $  (14,650)
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    13. INCOME TAXES

        The Trust is a mutual fund trust as defined under the Income Tax Act
        (Canada). All taxable income earned by the Trust has been allocated
        to unitholders and such allocations are deducted for income tax
        purposes.

        In June 2007, the government legislation implementing the new tax
        (the "SIFT tax") on publicly traded income trust and limited
        partnerships (Bill C-52) received third reading in the House of
        Commons and Royal Assent. For existing income trusts and limited
        partnerships, the SIFT tax will be effective in 2011 unless certain
        rules related to "undue expansion" are not adhered to. As such, the
        Trust would not be subject to the new measures until the 2011
        taxation year provided the Trust continues to meet certain
        requirements.

        As at March 31, 2009, the total "temporary difference" (tax basis
        exceeds accounting basis) in the Trust is $8.3 million. As at
        March 31, 2009, the Trust's subsidiaries have a tax basis of
        approximately $477 million that is available to shelter future
        taxable income. Included in this tax basis are estimated non-capital
        loss carry forwards of approximately $39.8 million that expire in
        years through 2027. In addition, the Trust itself has approximately
        $16.8 million of tax basis.

    14. PER TRUST UNIT AMOUNTS

        ---------------------------------------------------------------------
                                                 Three months ended March 31,
                                                            2009        2008
        ---------------------------------------------------------------------
        Basic trust units outstanding,
         as at March 31                               78,496,581  79,230,460
        Dilutive effect of:
          Trust unit incentive rights outstanding      4,118,132   5,232,665
          Units issuable for exchangeable shares         312,467     337,351
          Units issuable for convertible debentures    5,390,625   5,390,625
        ---------------------------------------------------------------------
        Diluted trust units outstanding               88,317,805  90,191,101
        ---------------------------------------------------------------------
        Weighted average trust units outstanding      78,496,581  79,223,088
        Dilutive effect of exchangeable shares,
         trust unit incentive plan and
         convertible debentures(1)                             -           -
        ---------------------------------------------------------------------
        Diluted weighted average trust units
         outstanding                                  78,496,581  79,223,088
        ---------------------------------------------------------------------
        (1) A total of 4,118,132 (2008: 5,232,665) trust incentive units,
            312,467 (2008: 337,351) exchangeable shares and 5,390,625 (2008:
            5,390,625) trust units issuable pursuant to the conversion of
            convertible debentures were excluded from the calculation for the
            three month period ended March 31, 2009 as they were not
            dilutive.

    15. FINANCIAL RISK MANAGEMENT

        a. Overview

        The Trust has exposure to the following risks from its use of
        financial instruments:

           -  Credit risk
           -  Liquidity risk
           -  Market risk

        This note presents information about the Trust's exposure to each of
        the above risks, the Trust's objectives, policies and processes for
        measuring and managing risk, and the Trust's management of capital.
        Further quantitative disclosures are included throughout these
        financial statements.

        The Board of Directors has overall responsibility for the
        establishment and oversight of the Trust's risk management framework.
        The Board has implemented and monitors compliance with risk
        management policies.

        The Trust's risk management policies are established to identify and
        analyze the risks faced by the Trust, to set appropriate risk limits
        and controls, and to monitor risks and adherence to market conditions
        and the Trust's activities.

        b. Credit risk

        Credit risk is the risk of financial loss to the Trust if a customer
        or counterparty to a financial instrument fails to meet its
        contractual obligations, and arises principally from the Trust's
        trade receivables from joint venture partners, petroleum and natural
        gas marketers, and financial derivative counterparties.

        A substantial portion of the Trust's accounts receivable are with
        customers and joint interest partners in the petroleum and natural
        gas industry and are subject to standard industry credit risks. The
        Trust sells substantially all of its production to eight primary
        purchasers under normal industry sale and payment terms. Purchasers
        of the Trust's natural gas, crude oil and natural gas liquids are
        subject to an internal credit review to minimize the risk of non-
        payment.

        The Trust has continued to closely monitor and reassess the
        creditworthiness of its counterparties, including financial
        institutions. This has resulted in the Trust reducing or mitigating
        its exposures to certain counterparties where it is deemed warranted
        and permitted under contractual terms.

        Receivables from petroleum and natural gas marketers are normally
        collected on the 25th day of the month following production. The
        Trust's policy to mitigate credit risk associated with these balances
        is to establish marketing relationships with a range of medium to
        large purchasers and to conduct credit reviews of these parties on a
        regular basis. Joint venture receivables are typically collected
        within one to three months of the joint venture bill being issued to
        the partner. The Trust attempts to mitigate the risk from joint
        venture receivables by obtaining partner approval of significant
        capital expenditures prior to expenditure. However, the receivables
        are from participants in the petroleum and natural gas sector, and
        collection of the outstanding balances is dependent on industry
        factors such as commodity price fluctuations, escalating costs and
        the risk of unsuccessful drilling. In addition, further risk exists
        with joint venture partners as disagreements occasionally arise that
        increase the potential for non-collection. The Trust does not
        typically obtain collateral from petroleum and natural gas marketers
        or joint venture partners; however, in certain instances the Trust
        does have the ability to withhold production from joint venture
        partners in the event of non-payment.


        As at March 31, 2009, accounts receivable was comprised of the
        following:

        ---------------------------------------------------------------------
        ($000s)
        ---------------------------------------------------------------------
        Trade accounts receivable                                      8,232
        Accrued and other accounts receivable                         17,342
        ---------------------------------------------------------------------
                                                                      25,574
        ---------------------------------------------------------------------

        The carrying amount of accounts receivable and derivative assets
        represents the maximum credit exposure. The Trust has an allowance
        for doubtful accounts as at March 31, 2009 of $0.5 million.

        As at March 31, 2009 the Trust estimates its trade accounts
        receivables to be aged as follows:

        ---------------------------------------------------------------------
        Aging ($000s)
        ---------------------------------------------------------------------
        Not past due (less than 90 days)                               3,953
        Past due (90 or more days)                                     4,279
        ---------------------------------------------------------------------
        Total                                                          8,232
        ---------------------------------------------------------------------

        After considering March 31, 2009 trade accounts payable from the same
        companies and cash receipts received subsequent to March 31, 2009,
        the Trust's trade receivables aged 90 or more days of approximately
        $4.3 million are reduced to a net balance of approximately
        $2.8 million.

        Included in accrued and other accounts receivable are approximately
        $5.5 million of amounts aged 90 or more days.

        c. Liquidity risk

        Liquidity risk is the risk that the Trust will not be able to meet
        its financial obligations as they are due. The Trust's approach to
        managing liquidity is to make reasonable efforts to sustain
        sufficient liquidity to meet its liabilities when due, under both
        normal and stressed conditions without incurring unacceptable losses
        or risking harm to the Trust's reputation.

        The Trust prepares annual capital expenditure budgets and determines
        unitholder distributions on a monthly basis. Capital expenditure
        budgets and levels of monthly unitholder distributions are regularly
        monitored and updated as considered necessary. Further, the Trust
        utilizes authorizations for expenditures on both operated and non-
        operated projects to further manage capital expenditures. To
        facilitate the capital expenditure program, the Trust has a revolving
        reserve based credit facility, as outlined in note 6, which is at
        least reviewed annually by the lender. The Trust attempts to match
        its payment cycle with collection of petroleum and natural gas
        revenues on the 25th of each month. The Trust also mitigates
        liquidity risk by maintaining an insurance program to minimize
        exposure to insurable losses.

        The following are the contractual maturities of financial liabilities
        as at March 31, 2009:

        ---------------------------------------------------------------------
        Financial liability   (less than)
         ($000s)                  1 Year   1-2 Years   2-5 Years  Thereafter
        ---------------------------------------------------------------------
        Accounts payable and
         accrued liabilities      32,600           -           -           -
        Distribution payable
         to unitholders                -           -           -           -
        Bank debt - principal(1)  16,922     114,700           -           -
        Convertible debentures
         - principal                   -           -      86,250           -
        ---------------------------------------------------------------------
        Total                     49,522     114,700      86,250           -
        ---------------------------------------------------------------------
        (1) Bank debt is based on a revolving term which is reviewed at least
            annually and converts to a 366 day non-revolving facility if not
            renewed. Refer to note 6 for further details.

        The Trust's convertible debentures outstanding at March 31, 2009 bear
        interest at a coupon rate of 7.5%, which currently requires total
        annual interest payments of $6.5 million. Interest due on the bank
        credit facility is calculated based upon floating rates.

        d. Market risk

        Market risk is the risk that changes in market prices, such as
        foreign exchange rates, commodity prices, and interest rates will
        affect the Trust's net earnings or the value of financial
        instruments. The objective of market risk management is to manage and
        control market risk exposures within acceptable limits, while
        maximizing returns.

        Foreign currency exchange rate risk

        Foreign currency exchange rate risk is the risk that the fair value
        of future cash flows will fluctuate as a result of changes in foreign
        exchange rates. Although substantially all of the Trust's petroleum
        and natural gas sales are denominated in Canadian dollars, the
        underlying market prices in Canada for petroleum and natural gas are
        impacted by changes in the exchange rate between the Canadian and
        United States dollar. As at March 31, 2009, if the Canadian/US dollar
        exchange rate had decreased by US$0.01 with all other variables held
        constant, after tax net earnings for the three month period ended
        March 31, 2009 would have been approximately $.03 million lower. An
        equal and opposite impact would have occurred to net earnings had the
        Canadian/US dollar exchange rate increased by US$0.01.

        The Trust had no forward exchange rate contracts in place as at or
        during the three month period ended March 31, 2009.

        Commodity price risk

        Commodity price risk is the risk that the fair value or future cash
        flows will fluctuate as a result of changes in commodity prices.
        Commodity prices for petroleum and natural gas are impacted by not
        only the relationship between the Canadian and United States dollar,
        as outlined above, but also world economic events that dictate the
        levels of supply and demand.

        The Trust utilizes both financial derivatives and physical delivery
        sales contracts to manage commodity price risks. All such
        transactions are conducted in accordance with the risk management
        policy that has been approved by the Board of Directors.

        The Trust's formal risk management policy permits management to use
        specified price risk management strategies for up to 50% of crude
        oil, natural gas and NGL production including fixed price contracts,
        costless collars and the purchase of floor price options, other
        derivative financial instruments, and physical delivery sales
        contracts to reduce the impact of price volatility and ensure minimum
        prices for a maximum of eighteen months beyond the current date. The
        program is designed to provide price protection on a portion of the
        Trust's future production in the event of adverse commodity price
        movement, while retaining significant exposure to upside price
        movements. By doing this, the Trust seeks to provide a measure of
        stability to funds flows from operations, as well as, to ensure True
        realizes positive economic returns from its capital developments and
        acquisition activities.

        As at March 31, 2009, if oil and natural gas liquids prices had been
        US$1 per barrel and natural gas prices $0.10 per mcf lower, with all
        other variables held constant, after tax net earnings for the three
        month period ended March 31, 2009 would have been approximately
        $1.7 million lower. An equal and opposite impact would have occurred
        to net earnings had oil and natural gas liquids prices been US$1 per
        barrel and natural gas $0.10 per mcf higher.

        As at March 31, 2009, the Trust had entered into commodity price risk
        management arrangements as follows:

    -------------------------------------------------------------------------
                                                       Price      Price
    Type                     Period        Volume      Floor    Ceiling Index
    -------------------------------------------------------------------------
    Natural Gas    March 1, 2009 to
     fixed            June 30, 2009  5,000 GJ/day  $4.89 CDN  $4.89 CDN  AECO
    Natural Gas    March 1, 2009 to
     fixed           Sept. 30, 2009  4,500 GJ/day  $5.00 CDN  $5.00 CDN  AECO
    Natural Gas    March 1, 2009 to
     fixed            Dec. 31, 2009  5,000 GJ/day  $5.90 CDN  $5.90 CDN  AECO
    Natural Gas    April 1, 2009 to
     fixed            June 30, 2009  5,275 GJ/day  $7.01 CDN  $7.01 CDN  AECO
    Natural Gas    April 1, 2009 to
     fixed            June 30, 2009  5,275 GJ/day $7.015 CDN $7.015 CDN  AECO
    Natural Gas     July 1, 2009 to
     fixed           Sept. 30, 2009  5,000 GJ/day  $5.41 CDN  $5.41 CDN  AECO
    Natural Gas     July 1, 2009 to
     fixed           Sept. 30, 2009  5,000 GJ/day  $7.49 CDN  $7.49 CDN  AECO
    Natural Gas     Oct. 1, 2009 to
     fixed            Dec. 31, 2009  5,000 GJ/day  $8.09 CDN  $8.09 CDN  AECO
    Natural Gas     Oct. 1, 2009 to
     fixed            Dec. 31, 2009  5,000 GJ/day  $6.26 CDN  $6.26 CDN  AECO
    Natural Gas     Jan. 1, 2010 to
     fixed           March 31, 2010  5,000 GJ/day  $7.16 CDN  $7.16 CDN  AECO
    Natural Gas     Jan. 1, 2010 to
     fixed           March 31, 2010  5,000 GJ/day  $8.00 CDN  $8.00 CDN  AECO
    Natural Gas     Jan. 1, 2010 to
     call option      Dec. 31, 2010  5,000 GJ/day          -  $8.05 CDN  AECO
    Natural Gas    April 1, 2010 to
     fixed            June 30, 2010  5,000 GJ/day  $6.59 CDN  $6.59 CDN  AECO
                   March 1, 2009 to
    Oil collar(1)     Dec. 31, 2009     500 bbl/d  $42.50 US  $65.60 US   WTI
    -------------------------------------------------------------------------
    (1) Subsequent to March 31, 2009, this oil collar was converted to
        Canadian dollar denomination as priced at $52.30 CDN and $80.70 CDN,
        respectively.

        For the three months ended March 31, 2009 and 2008, the gain (loss)
        on commodity contracts was comprised of the following:

        ---------------------------------------------------------------------
        ($000s)                                             2009        2008
        ---------------------------------------------------------------------

        Gain (loss) on commodity contracts
          Realized(1)                                 $    2,631  $   (4,142)
          Unrealized(2)                                    7,844     (17,687)
        ---------------------------------------------------------------------
                                                      $   10,475  $  (21,829)
        ---------------------------------------------------------------------
        (1) Realized gains and losses on commodity contracts represent actual
            cash settlements and other amounts paid under these contracts.
        (2) Unrealized gains and losses on commodity contracts represent non-
            cash adjustments for changes in the fair value of these contracts
            during the period.

        The Trust has entered into a natural gas physical delivery sales
        contract to sell 5,275 GJ/day at a fixed price of $7.29/GJ and
        $7.90/GJ for the third and fourth quarter of 2009, respectively.

        Interest rate risk

        Interest rate risk is the risk that future cash flows will fluctuate
        as a result of changes in market interest rates. The Trust is exposed
        to interest rate fluctuations on its bank debt which bears a floating
        rate of interest. As at March 31, 2009, if interest rates had been 1%
        lower with all other variables held constant, after tax net earnings
        for the three month period ended March 31, 2009 would have been
        approximately $0.9 million higher, due to lower interest expense. An
        equal and opposite impact would have occurred to net earnings had
        interest rates been 1% higher.

        The Trust had no interest rate swap or financial contracts in place
        during the three month period ended March 31, 2009.

        e. Capital management

        The Trust's policy is to maintain a strong capital base so as to
        maintain investor, creditor and market confidence and to sustain the
        future development of the business. The Trust manages its capital
        structure and makes adjustments to it in the light of changes in
        economic conditions and the risk characteristics of the underlying
        petroleum and natural gas assets. The Trust considers its capital
        structure to include unitholders' equity, bank debt, convertible
        debentures and working capital. In order to maintain or adjust the
        capital structure, the Trust may from time to time issue trust units,
        adjust its capital spending, and/or dispose of certain assets to
        manage current and projected debt levels.

        The Trust monitors capital based on the ratio of total net debt to
        annualized funds flow (the "ratio"). This ratio is calculated as
        total net debt, defined as outstanding bank debt, plus the liability
        component of convertible debentures, plus or minus working capital
        (excluding commodity contract assets and liabilities, current portion
        of long-term debt and future income tax assets or liabilities),
        divided by funds flow from operations (cash flow from operating
        activities before changes in non-cash working capital and deductions
        for asset retirement costs) for the most recent calendar quarter,
        annualized (multiplied by four). The total net debt to annualized
        funds flow ratio may increase at certain times as a result of
        acquisitions, fluctuations in commodity prices, timing of capital
        expenditures and other factors. In order to facilitate the management
        of this ratio, the Trust prepares annual capital expenditure budgets
        and sets unitholder distributions on a monthly basis. Capital
        expenditure budgets and levels of monthly unitholder distributions
        are reviewed and updated as necessary depending on varying factors
        including current and forecast prices, successful capital deployment
        and general industry conditions. The annual and updated budgets and
        monthly unitholder distributions are approved by the Board of
        Directors.

        Given the continuing uncertain economic conditions, the Trust has
        suspended unit distributions in order to maintain financial
        flexibility. The Trust plans to continue to monitor forecasted debt
        levels to manage its operations within forecasted funds flow. The
        Trust expects the total net debt to annualized funds flow ratio to
        reflect the economic burdens experienced as a result of the recent
        downturn in the global economic environment. The Trust will continue
        to monitor developments within the global economic environment to
        consider the impacts on the current or future lending arrangements.

        The Trust's long-term strategy, under a more stable economic
        environment, is to target a total net debt to annualized funds flow
        ratio of 2.0 times. As at March 31, 2009, the Trust's ratio of total
        net debt to annualized funds flow based on first quarter results was
        8.2 times. The total net debt to annualized funds flow ratio as at
        March 31, 2009 decreased from that at December 31, 2008 of 9.2 times
        due to slightly higher funds flow from operations in the first
        quarter in addition to lower total net debt. The Trust expects this
        ratio to decrease through 2009 as total net debt levels are reduced;
        True continues to take a balanced approach to the priority use of
        funds flows. The Debentures have a maturity date of June 30, 2011.
        Upon maturity, the Trust may settle the principal in cash or issuance
        of additional Trust units. Excluding Debentures, net debt to
        annualized funds flow based on first quarter results was 5.1 times.

        The calculation of total net debt and total net debt to cash flow is
        as follows:

        ---------------------------------------------------------------------
        As at March 31,
        ($000s, except where noted)                         2009        2008
        ---------------------------------------------------------------------
        Long-term debt                                   131,622     171,850
        Convertible debentures (liability component)      81,598      79,837
        Working capital deficiency (excess)                  709     (12,219)
        ---------------------------------------------------------------------
        Total net debt(1) at year end                    213,929     239,468

        Debt to funds flow from operations ratio
         (annualized)(2)
        Funds flow from operations (annualized)           25,956      96,932
        Total net debt(1) to periods funds flow
         from operations ratio (annualized)                 8.2x        2.5x

        Net debt(1) (excluding convertible debentures)
         at quarter end                                  132,331     159,631
        Net debt to periods funds flow from operations
         ratio (annualized)                                 5.1x        1.6x

        Debt to funds flow from operations ratio
         (trailing)(3)
        Total net debt to periods funds flow from
         operations ratio (trailing)                        3.6x        2.5x
        Net debt to periods funds flow from operations
         ratio (trailing)                                   2.2x        1.7x
        ---------------------------------------------------------------------
        (1) Net debt includes the net working capital deficiency (excess)
            before short-term commodity contract assets and liabilities,
            current portion of long-term debt and short-term future income
            tax assets and liabilities. Total net debt also includes the
            liability component of convertible debentures and excludes asset
            retirement obligations and the future income tax liability.
        (2) Debt to funds flow from operations ratio (annualized) is
            calculated based upon first quarter funds flow from operations
            annualized.
        (3) Trailing periods funds flow from operations is based on the
            trailing twelve-months period ended March 31, 2009 and 2008.

        The Trust's credit facility is based on petroleum and natural gas
        reserves (see note 6). The credit facility outlines limitations on
        percentages of forecasted production, from external reserve engineer
        data, which may be hedged through financial commodity risk management
        contracts and limitations on property dispositions without prior
        consent of the lenders. The Trust also has outstanding normal course
        issuer bids for its convertible debentures and trust units, as
        detailed in note 7 and 10, respectively.

        The Trust's ability to issue trust units is subject to external
        restrictions as a result of the Specified Investment Flow-Through
        Entities Legislation (the "SIFT tax") whereby the Trust may lose the
        benefit of a four year grandfathering period if the Trust exceeds the
        limits on the issuance of new trust units and convertible debt that
        constitute normal growth during the grandfathering period (subject to
        certain exceptions). The normal growth limits are calculated as a
        percentage of the Trust's market capitalization of approximately
        $737 million on October 31, 2006, which the Trust may currently issue
        in additional equity without offending the normal growth guidelines
        between now and 2011. The normal growth restriction on trust unit
        issuance is monitored by management as part of the overall capital
        management objectives. The Trust is in compliance with the normal
        growth restrictions.

        f. Fair value of financial instruments

        The Trust's financial instruments as at March 31, 2009 include
        accounts receivable, deposits, marketable securities, commodity
        contract liability, accounts payable and accrued liabilities,
        distributions payable, long-term debt and convertible debentures. The
        fair value of accounts receivable, accounts payable and accrued
        liabilities and distributions payable approximate their carrying
        amounts due to their short-terms to maturity.

        The fair value of commodity contracts is determined by discounting
        the difference between the contracted price and published forward
        price curves as at the balance sheet date, using the remaining
        contracted petroleum and natural gas volumes.

        Long-term bank debt bears interest at a floating market rate and
        accordingly the fair market value approximates the carrying value.

        The fair value of the convertible debentures of $44.2 million is
        based on exchange traded values.
    

    True Energy Trust is a Calgary-based oil and natural gas trust. True is
an open-ended, incorporated investment trust governed by the laws of the
Province of Alberta. The purpose of the Trust is to indirectly explore for,
develop and hold interests in petroleum and natural gas properties, through
investments in securities of subsidiaries and net profits interests. The trust
structure allows individual unitholders to participate in the cash flow of the
business. Cash flow is realized from the Trust's subsidiaries' ownership of
natural gas and petroleum properties and related facilities. Trust units and
convertible debentures of True trade on the Toronto Stock Exchange ("TSX")
under the symbols TUI.UN and TUI.DB, respectively.





For further information:

For further information: Raymond G. Smith, P.Eng., President and CEO
(403) 750-2420 or Edward J. Brown, CA, Vice President, Finance and CFO (403)
750-2655 or Sacha Ravelli, Manager, Investor Relations (403) 750-7085 True
Energy Trust 2300, 530 - 8th Avenue SW Calgary, Alberta, Canada T2P 3S8 Phone:
(403) 266-8670 Fax: (403) 264-8163 www.trueenergytrust.com


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