Canadian Oil

[kraftdinner]

TRUE ENERGY TRUST PROVIDES Q1 2007 OPERATIONAL UPDATE

True Energy Trust is providing the following operational update. True has had an active start to the year, initiating an estimated $50-million of projects in the first quarter and the disposition of $19.4-million of non-core properties. Capital was deployed in west-central Alberta, primarily focused on the company's multizone, liquids-rich drilling inventory, and in Kerrobert in west-central Saskatchewan, primarily related to the SAGD project. Highlights for the quarter include:


4,700 barrels of oil equivalent per day of new production, of which 600 barrels of oil equivalent per day are currently producing, with the remainder to be tied in throughout 2007;
seven new pool discoveries -- six in Alberta and one in Saskatchewan;
33 wells drilled with a success rate of 97 per cent;
tax pools in excess of $500-million;
1.1 million gross acres of undeveloped land; and
in excess of 600 drilling locations identified.

Drilling and completions

Drilling success year to date is 97 per cent, with True having participated in 33 gross wells (23.6 net), 20 of those (19.5 net) being operated. Sixteen wells were cased as gas wells, 14 as oil wells, two as potential disposal wells, and one non-operated dry and abandoned.

West-central Alberta was True's most active area in the first quarter. Operated and non-operated activity has resulted in the addition of significant field-tested volumes that will come on during the remainder of 2007. This area delivers multizone, liquids-rich gas production. True and its partners are actively working toward bringing this gas on-line. Test rates on those wells completed have ranged between 150 gross barrels of oil equivalent per day and 1,500 gross barrels of oil equivalent per day per well, averaging 550 barrels of oil equivalent per day (350 net barrels of oil equivalant per day). Current spring breakup conditions will defer capture of some of the volumes to later in 2007. Six of the wells are at various stages of tie-in and should contribute significantly to the second quarter 2007 production volumes. True found six new pools in Alberta during the first quarter of 2007, all of which have development opportunities. In addition, True drilled a horizontal well in the Rock Creek formation to further test multistage well fracture stimulation technology. Final rates prior to shutting in the well for buildup were in excess of 700 barrels of oil equivalent per day (500 net barrels of oil equivalent per day). Initial data suggest that the well's performance will be similar to True's best-producing horizontals in the area. More significant are the learnings captured and the confidence gained in further applying this completion methodology to its large inventory of west-central Alberta tight gas. This well is anticipated to be tied in during the next 30 days. In total, the west-central Alberta drilling program increased capability from the region by approximately 2,500 barrels of oil equivalent per day.

In Kerrobert, True has completed its initial campaign of five cold producers and four thermal wells. All five cold producers are on-line, currently averaging 95 barrels per day per well. The four thermal wells are cased, and awaiting equipping prior to the conversion and subsequent steaming of the paired injectors. Execution of the SAGD project is on track, with expected steam injection for phase 1 to commence at the end of the third quarter. Material rate impact is anticipated from the thermal wells during late fourth quarter, 2007, and early first quarter, 2008. Depending on 2007 capital budget levels, there is an additional round of cold producers slated for the fourth quarter of 2007, further delineating and developing a recently identified western extension of the pool. The Kerrobert heavy oil area, including current thermal production, is delivering 2,300 barrels per day. Production at year-end 2007 is anticipated to be approximately 4,300 barrels per day to 5,000 barrels per day. Along with the Kerrobert activity, True discovered a new pool heavy oil pool and an extension to its light oil Viking discovery of last year. The light oil extension could lead to 20 drilling locations for the 2008 drilling program.

Case Caulfield, vice-president of exploration, commented, "This is the most successful program True has had from an exploration and development point of view in its history."

Production guidance

True reiterates its guidance of approximately 19,000 barrels of oil equivalent per day for first quarter of 2007 production and 20,500 barrels of oil equivalent per day of average annual production for 2007, up from 13,861 barrels of oil equivalent per day in 2006. With $70-million left to be spent throughout the remainder of 2007, and the exceptional results of the first quarter, True is well positioned to exceed the current targeted exit rate. These volumes take into account impact from extreme winter conditions, early spring breakup, natural production declines and curtailment of offset production while executing the Saskatchewan drilling campaign.

Dispositions

During the quarter, the company entered into two separate agreements to sell non-core properties anticipated to close prior to the end of March, 2007. These asset sales in central Alberta will generate approximately $19.4-million, subject to standard industry adjustments and final closing. The properties sold have combined production of approximately 320 barrels of oil equivalent per day. True continues to offer approximately 950 barrels of oil equivalent per day of additional production through the packages outlined on the Tristone Capital Inc. website. These sales may occur during the second quarter of 2007. All the proceeds of these dispositions will be applied to current bank indebtedness. The board and management are committed to a year-end total debt target of $200-million, comprising $120-million, including bank debt, working capital and $80-million of convertible debentures. This would be in line with True's targeted ratio of 1.3 times total debt to cash flow.

In summary

Over all, True is very encouraged by its first quarter results. "The results are indicative of the potential of True's asset base when higher levels of capital are applied," says Paul Baay, president and chief executive officer of True. Remaining 2007 capital will be further clarified once the annual and special meeting of unitholders scheduled for March 30, 2007, is complete. Initial estimates of capital efficiency appear to be better than corporate guidance of $16,500 to $18,000 per flowing barrel of oil equivalent per day. True would also like to reiterate its previously announced hedges, details of which can be found on its corporate website, providing further cash flow protection through 2007.

The board of True would like to thank all employees for their exceptional work and dedication, which have resulted in these production additions during what has turned out to be a very demanding time for True.

True has the structure, systems and engineering, geoscience, land and business expertise in place to continue to grow, and take advantage of its significant undeveloped land base, multiyear drilling inventory and substantial tax pools. True encourages all unitholders to vote for the upcoming special and annual meeting. For any questions regarding the reorganization or how to fill out the proxy, please contact Kingsdale Shareholder Services Inc.

We seek Safe Harbor.