SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

PENGROWTH ENERGY TRUST

2900, 240 — 4^th Avenue S.W.
Calgary, Alberta T2P 4H4 Canada
(address of principal executive offices)

     [Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.]

Form 20-F o		Form 40-F þ

     [Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Security Exchange Act of 1934.

Yes o		No þ

     [If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):                    ]

 

 

DOCUMENTS FURNISHED HEREUNDER:

1.

Press Release announcing second quarter 2005 results.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Attention: Financial Editors		Stock Symbol:		(PGF.A / PGF.B) — TSX;
				(PGH) — NYSE

PENGROWTH ENERGY TRUST ANNOUNCES SECOND QUARTER 2005 RESULTS

(Calgary, August 4, 2005) /CCNMatthews/ — Pengrowth Corporation (“Pengrowth”), administrator of Pengrowth Energy Trust, announced the interim unaudited operating and financial results for the three month and six month periods ended June 30, 2005.

•

During the second quarter of 2005, Pengrowth generated record distributable cash at $134 million versus $99 million in the second quarter of 2004, an increase of more than 35 percent. Combined with Pengrowth’s prior record of $128 million, achieved in the first quarter of this year, distributable cash for the first half of 2005 was $262 million, up 36% from $192 million in the comparable period of 2004 representing the highest level of distributable cash generated over any six month period in Pengrowth’s history.

•

Distributions to unitholders were maintained at $0.23 per trust unit per month resulting in a year-to-date payout ratio of approximately 83 percent of funds generated from operations.

•

On April 29, 2005, Pengrowth completed the acquisition of Crispin Energy Inc. which held interests in oil and natural gas assets mainly in Alberta. This represented Pengrowth’s first acquisition of a publicly traded corporation and was funded through the issuance of Class A and Class B trust units valued at approximately $88 million. The Crispin acquisition is accretive in terms of both production and distributable cash per trust unit and adds estimated reserves of 5.2 million barrels of oil equivalent on a proved plus probable basis.

•

Production volumes increased 13 percent over second quarter 2004 averaging approximately 58,000 barrels of oil equivalent per day.

•

Capital expenditures for the second quarter of $28.9 million were fully funded with cash withheld from distributable cash and proceeds from the exercise of trust unit rights and options.

•

During the second quarter, Pengrowth lowered its foreign ownership in the fund to less than 49.75 percent of combined Class A and Class B trust units issued and outstanding. In doing so, Pengrowth complied with its advance tax ruling from the Canada Revenue Agency regarding Pengrowth’s status as a mutual fund trust.

•

Subsequent to quarter end, Pengrowth executed purchase and sale agreements with several parties for the sale of certain non-core Pengrowth properties with associated production estimated at 600 barrels of oil equivalent per day for gross proceeds of approximately $37 million.

•

The trust’s net debt to annualized second quarter 2005 cash flow from operations was approximately 1.1 times at the end of the second quarter of 2005 as compared to 1.7 times at the end of the second quarter of 2004. Net debt to total capitalization was 13.7 percent versus 21.1 percent year over year.

Note regarding currency: All figures contained within this report are quoted in Canadian dollars unless otherwise indicated.

— 2 — PENGROWTH ENERGY TRUST

Summary of Financial and Operating Results

		Three Months ended												Six Months ended
		June 30								%				June 30								%
($thousands, except per unit amounts)		2005				2004				Change				2005				2004				Change
INCOME STATEMENT
Oil and gas sales		$	247,903			$	193,637				28	%		$	484,671			$	359,517				35	%
Net income		$	53,106			$	32,684				62	%		$	109,420			$	71,336				53	%
Net income per unit		$	0.34			$	0.24				42	%		$	0.71			$	0.55				29	%
Funds generated from operations		$	135,048			$	102,932				31	%		$	261,455			$	194,730				34	%
Funds generated from operations per unit		$	0.86			$	0.76				13	%		$	1.69			$	1.49				13	%
Distributable cash*		$	134,047			$	99,021				35	%		$	261,851			$	191,917				36	%
Distributable cash per unit*		$	0.86			$	0.73				18	%		$	1.69			$	1.47				15	%
Distributions		$	101,237			$	89,119				14	%		$	216,259			$	172,723				25	%
Distributions paid or declared per unit		$	0.69			$	0.64				8	%		$	1.38			$	1.27				9	%
Weighted average number of units outstanding			156,718				135,473				16	%			155,062				130,346				19	%
BALANCE SHEET
Working capital		$	(90,479	)		$	(270,681	)			(67	)%		$	(90,479	)		$	(270,681	)			(67	)%
Property, plant and equipment and other assets		$	2,141,769			$	1,990,977				8	%		$	2,141,769			$	1,990,977				8	%
Long-term debt		$	461,508			$	371,760				24	%		$	461,508			$	371,760				24	%
Unitholders’ equity		$	1,461,384			$	1,264,586				16	%		$	1,461,384			$	1,264,586				16	%
Unitholders’ equity per unit		$	9.23			$	9.32				(1	)%		$	9.23			$	9.32				(1	)%
Number of units outstanding at period end			158,283				135,677				17	%			158,283				135,677				17	%
DAILY PRODUCTION
Crude oil (barrels)			20,906				20,906				—				20,676				21,211				(3	)%
Heavy oil (barrels)			5,641				1,848				205	%			5,842				924				532	%
Natural gas (thousands of cubic feet)			153,423				136,142				13	%			155,446				126,745				23	%
Natural gas liquids (barrels)			5,870				6,007				(2	)%			6,106				5,300				15	%
Total production (BOE) 6:1			57,988				51,451				13	%			58,532				48,560				20	%
TOTAL PRODUCTION (MBOE) 6:1			5,277				4,682				13	%			10,594				8,838				20	%
PRODUCTION PROFILE (6:1 conversion)
Crude oil			36	%			41	%							35	%			44	%
Heavy oil			10	%			3	%							10	%			2	%
Natural gas			44	%			44	%							44	%			43	%
Natural gas liquids			10	%			12	%							11	%			11	%
AVERAGE PRICES
Crude oil (per barrel)		$	56.44			$	42.46				33	%		$	55.45			$	41.50				34	%
Heavy oil (per barrel)		$	30.32			$	30.19				—			$	27.27			$	30.19				(10	)%
Natural gas (per mcf)		$	7.34			$	7.08				4	%		$	7.09			$	6.96				2	%
Natural gas liquids (per barrel)		$	50.03			$	40.75				23	%		$	50.26			$	39.16				28	%
Average price per BOE 6:1		$	46.98			$	41.36				14	%		$	45.75			$	40.68				12	%

PENGROWTH ENERGY TRUST — 3 —

Summary of Trust Unit Trading Data

		Three Months ended																Six Months ended
		June 30																June 30
(thousands, except per unit amounts)		2005								2004								2005								2004
TRUST UNIT TRADING (Class A)
PGH (NYSE) after unit re-class**
High		$	22.74			US												$	22.94			US
Low		$	19.05			US												$	18.11			US
Close		$	22.25			US												$	22.25			US
Value		$	334,986			US												$	850,117			US
Volume (thousands of units)			16,153																40,774
PGF.A (TSX) **
High		$	27.90															$	28.29
Low		$	23.95															$	22.15
Close		$	27.20															$	27.20
Value		$	46,405															$	99,672
Volume (thousands of units)			1,798																3,847
TRUST UNIT TRADING (Class B)
PGF.B (TSX) **
High		$	19.01															$	19.90
Low		$	16.37															$	16.10
Close		$	18.40															$	18.40
Value		$	342,470															$	886,171
Volume (thousands of units)			19,370																48,589
TRUST UNIT TRADING (before unit re-class)
PGH (NYSE) before unit re-class**
High										$	14.24			US												$	16.60			US
Low										$	11.62			US												$	11.62			US
Close										$	13.98			US												$	13.98			US
Value										$	295,835			US												$	821,444			US
Volume (thousands of units)											22,194																59,093
PGF.UN (TSX) **
High										$	19.15															$	21.25
Low										$	16.15															$	15.55
Close										$	18.67															$	18.67
Value										$	328,450															$	896,235
Volume (thousands of units)											18,145																48,765

— 4 — PENGROWTH ENERGY TRUST

Note Regarding Forward-Looking Statements

This discussion and analysis contains forward-looking statements. These statements relate to future events or our future performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue”, or the negative of these terms or other comparable terminology. These statements are only predictions. A number of factors, including the business risks discussed below, may cause actual results to vary materially from these estimates. Actual events or results may differ materially. In addition, this discussion contains forward-looking statements attributed to third party industry sources. Readers should not place undue reliance on these forward-looking statements.

When converting natural gas to equivalent barrels of oil within this discussion, Pengrowth uses the international standard of 6 thousand cubic feet (mcf) to one barrel of oil equivalent (boe). Production volumes and revenues are reported on a gross basis (before crown and freehold royalties) in accordance with Canadian practice. All amounts are stated in Canadian dollars unless otherwise specified.

Non-GAAP Financial Measures

This discussion and analysis refers to certain financial measures that are not determined in accordance with Canadian Generally Accepted Accounting Principals (‘GAAP’). These measures do not have standardized meanings and may not be comparable to similar measures presented by other trusts or corporations. Measures such as distributable cash, distributable cash per unit and operating netbacks do not have standardized meanings prescribed by GAAP. During the second quarter, Pengrowth’s withholding practice and presentation of distributable cash has changed. The impact of the new practice is discussed in the Distributions and Taxability of Distributions section of this report, while the remaining non–GAAP measures are determined by reference to our financial statements. We discuss these measures because we believe that they facilitate the understanding of the results of our operations and financial position.

Overview

During the second quarter, Pengrowth successfully completed the previously disclosed acquisition of all of the issued and outstanding shares of Crispin Energy Inc. The acquisition added estimated proved plus probable reserves of approximately 5.2 million boe estimated by Gilbert Laustsen Jung Associates Ltd. as at January 1, 2005.

Continued strength in commodity prices and production added through the Murphy, Swan Hills Unit No. 1 and Crispin Energy Inc. acquisitions, which closed on May 31, 2004, February 28, 2005 and April 29, 2005, respectively, had a favourable impact on 2005 second quarter results relative to the second quarter of 2004.

Net Income

Net income for the second quarter of 2005 was $53.1 million ($0.34 per trust unit) compared to $32.7 million ($0.24 per trust unit) for the previous year. For the first six months of 2005 Pengrowth recorded net income of $109.4 million ($0.71 per trust unit), compared to $71.3 million ($0.55 per trust unit) for the previous year. The increase in net income for the second quarter of 2005 compared to the same period last year is due mainly to a 13 percent increase in production volumes and a 14 percent increase in average commodity prices.

Production

Production for the second quarter of 2005 increased 13 percent to just below 58,000 boe per day compared to approximately 51,500 boe per day for the second quarter of 2004, due to a full quarter of production in 2005 from the Murphy acquisition and the increased working interest in Swan Hills Unit No. 1 as well as two months of production from the Crispin acquisition. Partially offsetting the production increase was the timing of Sable Offshore Energy Project (SOEP) condensate shipments and natural production declines. On a year-to-date basis, production for the six months ended June 30, 2005 was 20 percent higher than the same period last year.

		Three months ended June 30												Six months ended June 30
Daily Production		2005				2004				% Change				2005				2004				% Change
Light crude oil (bbls)			20,906				20,906				—				20,676				21,211				(3	)%
Heavy oil (bbls)			5,641				1,848				205	%			5,842				924				532	%
Natural gas (mcf)			153,423				136,142				13	%			155,446				126,745				23	%
Natural gas liquids (bbls)			5,870				6,007				(2	)%			6,106				5,300				15	%
Total boe/d			57,988				51,451				13	%			58,532				48,560				20	%

Light oil production volumes were unchanged in the second quarter compared to the second quarter of 2004. The Murphy, Swan Hills and Crispin acquisitions, in addition to development activities over the past year, combined to offset natural production declines. Heavy oil production was derived from the May 31, 2004 Murphy acquisition, including working interests in Tangleflags and Bodo.

PENGROWTH ENERGY TRUST — 5 —

Natural gas production increased 17 mmcf /day (13 percent) in the second quarter of 2005 compared to the second quarter of 2004. Additional gas volumes from the Murphy and Crispin acquisitions, as well as incremental volumes from development activities, including the Monogram area, more than offset the impact of natural production declines.

Natural gas liquids (NGL) production decreased by two percent in the second quarter of 2005 over the same quarter of 2004. The fluctuation in NGL sales from quarter to quarter is due in part to the timing of condensate sales from SOEP. One condensate shipment was made in the second quarter of 2005, compared to two shipments in the same period last year. Pengrowth anticipates five to six shipments for 2005.

Total production for the second quarter of 2005 is down approximately 1,100 boe per day compared to the first quarter of 2005. The main reason for this decrease is one less SOEP condensate shipment which reduced quarterly production by 740 boe per day and third party gas plant maintenance in British Columbia.

Prices

Pengrowth’s average commodity price per boe for the second quarter of 2005, after the impact of hedging, was 14 percent higher than the second quarter of 2004.

Average realized prices Cdn$		Three months ended June 30												Six months ended June 30
(after the impact of hedging)		2005				2004				% Change				2005				2004				% Change
Light crude oil (per bbl)		$	56.44			$	42.46				33	%		$	55.45			$	41.50				34	%
Heavy oil (per bbl)			30.32				30.19				—				27.27				30.19				(10	)%
Natural gas (per mcf)			7.34				7.08				4	%			7.09				6.96				2	%
Natural gas liquids (per bbl)			50.03				40.75				23	%			50.26				39.16				28	%
Total per boe		$	46.98			$	41.36				14	%		$	45.75			$	40.68				12	%

Pengrowth’s average light oil price increased 33 percent in the second quarter of 2005 and 34 percent for the first half compared to the same periods of 2004. Although the West Texas Intermediate (WTI) benchmark price increased 39 percent in the second quarter of 2005 compared to the same period last year, it was partially offset by a nine percent depreciation in the value of the U.S. dollar relative to the Canadian dollar and a small downward adjustment in Pengrowth’s average field quality differentials relative to benchmark pricing.

Pengrowth’s heavy oil price showed a marginal increase in the second quarter of 2005, while the first half of 2005 compared to 2004 shows a decrease of 10% largely due to the light/heavy price differential.

Pengrowth’s average natural gas price for the second quarter of 2005 increased to $7.34 per mcf compared to $7.08 per mcf over the same period last year. Pengrowth’s average natural gas prices remained relatively stable year over year reflective of the small increase (five percent) in the AECO Index price. NYMEX last day average price increased by 12 percent but this was partially offset by a weaker U.S. dollar relative to the Canadian dollar. Pengrowth did not experience the full effect of increased market prices as certain fixed price gas contracts which were part of the Murphy acquisition partially offset the increase in market prices.

Price Risk Management Program

Pengrowth uses forward price swap and option contracts to manage its exposure to commodity price fluctuations, to provide a measure of stability to our monthly cash distributions and to lock in early year returns of new acquisitions. On a combined basis, oil and gas hedging losses were $9.8 million ($1.86 per boe) for the second quarter and $16.5 million ($1.56 per boe) for the first half of 2005 compared to $15.6 million ($3.33 per boe) and $27.4 million ($3.10 per boe) for the respective periods of 2004.

In the second quarter of 2005, Pengrowth realized a net hedging gain of $1.2 million ($0.09 per mcf) related to natural gas financial swap contracts, compared to a net hedging loss of $2.8 million ($0.23 per mcf) for the same period last year. On a year-to-date basis, Pengrowth has realized a net hedging gain of $1.1 million ($0.04 per mcf) in the first six months of 2005 related to natural gas financial swap contracts, compared to a net hedging loss of $7.5 million ($0.33 per mcf) for the same period of last year.

With the continued strength in crude oil prices in the second quarter, Pengrowth realized a net hedging loss of $11 million ($5.78 per bbl) on light crude oil price swap transactions, compared to a loss of $12.8 million ($6.72 per bbl) in the second quarter of 2004. On a year-to-date basis, Pengrowth has realized a net hedging loss of $17.6 million ($4.71 per bbl) for the first six months of 2005 on light crude oil price swap transactions, compared to a net hedging loss of $19.9 million ($5.15 per bbl) for the first half of 2004. In conjunction with the purchase of the Murphy acquisition on May 31, 2004, Pengrowth assumed certain fixed price natural gas sales contracts associated with the Murphy reserves. Under these contracts, Pengrowth is obligated to sell 3,886 MMBTU per day, until April 30, 2009 at an average contract price of Cdn $2.27 per MMBTU. As required by GAAP, the fair value of the contract was

— 6 — PENGROWTH ENERGY TRUST

recognized as a liability based on the mark-to-market value at May 31, 2004. The liability at June 30, 2005 of $21.1 million will continue to be drawn down and recognized in income as the contract is settled. At June 30, 2005, the mark-to-market value of Pengrowth’s fixed price physical sales contract represented a potential loss of $29.9 million. As this is a non-cash component of income, it is not included in the calculation of distributable cash.

Pengrowth currently has 10,000 barrels per day of crude oil hedged for the remainder of 2005 at an average price of Cdn $54.39 per barrel and a further 4,000 barrels per day is hedged for 2006 at Cdn $64.08 per barrel. Western gas production of 2,370 MMBTU per day is hedged at an average price of Cdn $8.35 per MMBTU for the period of May 1 to December 31, 2005 and a further 2,370 MMBTU per day is hedged at Cdn $8.03 per MMBTU for 2006. Eastern gas production of 16,000 MMBTU per day is hedged at an average delivered price of Cdn $9.53 per MMBTU for the remainder of 2005 and 2,500 MMBTU per day is hedged at Cdn $10.63 for 2006. For the remainder of 2005, Pengrowth has a Mid-Continent (Chicago) hedge of 2,500 MMBTU per day at Cdn $9.41 per MMBTU. The details of Pengrowth’s commodity hedges are provided in Note 9 to the financial statements.

At June 30, 2005, the mark-to-market value of Pengrowth’s commodity hedges represented a potential loss of $43.6 million consisting of a loss of $2.1 million on natural gas contracts and $41.5 million for crude oil contracts.

Royalties

Royalties, including crown and freehold royalties, were 17 percent of oil and gas sales in the second quarter of 2005, compared to 16 percent in the second quarter of 2004 due to the higher effective rates applicable at higher commodity prices. For the six month period, royalties were 17 percent and 15 percent in 2005 and 2004, respectively.

Operating Costs

Operating costs were $50.4 million ($9.56 per boe) for the second quarter of 2005, compared to $38.8 million ($8.29 per boe) for the second quarter of 2004. For the six months ended June 30, 2005, operating costs were $99.5 million ($9.39 per boe) compared to $70 million ($7.92 per boe) for the first half of 2004. Higher operating costs associated with the Murphy Assets and Swan Hills acquisitions contributed to higher operating costs on a per boe basis compared to the second quarter of 2004.

Heavy oil operating costs in 2005 have been impacted by a $2.1 million prior period adjustment on a non-operated property and higher costs associated with rising natural gas costs in SAGD thermal recovery operations.

Injectants for Miscible Floods

During the second quarter of 2005, Pengrowth purchased $5.7 million of injectants and amortized a related $6 million against second quarter net income and distributable cash, compared to $1.9 million and $4.8 million, respectively, in second quarter of 2004. On a year-to-date basis, Pengrowth has purchased $13.3 million of injectants and amortized $11.4 million, compared to $9.2 million and $10 million in the same period last year. The increase in injectant costs year over year is due mainly to Pengrowth’s increased working interest at Swan Hills. The majority of ethane and natural gas volumes injected at Judy Creek are proprietary volumes produced from Judy Creek and Swan Hills and then re-injected. Revenue is not recorded for volumes that are produced and subsequently re-injected.

At June 30, 2005, the balance of unamortized injectant costs was $27 million.

Operating Netbacks

There is no standardized measure of operating netbacks and therefore, operating netbacks, as presented below, may not be comparable to similar measures presented by other companies. Certain assumptions have been made in allocating operating expenses, other production income, other income and royalty injection credits between light crude oil, heavy oil, natural gas and natural gas liquids production.

Operating netbacks during the quarter increased by approximately 14 percent reflecting the overall increase in oil and gas prices, net of hedging, offset partially by the increase in operating costs per boe.

PENGROWTH ENERGY TRUST — 7 —

Combined Netbacks ($  per Bbl)

		Three months ended								Six months ended
		June 30, 2005				June 30, 2004				June 30, 2005				June 30, 2004
Sales Price		$	47.79			$	41.83			$	46.38			$	41.15
Other production income			0.19				0.30				0.17				0.27
GORR Royalties			(1.00	)			(0.77	)			(0.80	)			(0.74	)
			46.98				41.36				45.75				40.68
Other income			1.39				0.71				1.09				0.76
Crown and Freehold Royalties			(8.08	)			(6.64	)			(7.55	)			(6.28	)
Operating costs			(9.56	)			(8.29	)			(9.39	)			(7.92	)
Transportation Costs			(0.34	)			(0.40	)			(0.34	)			(0.38	)
Amortization of injectants			(1.13	)			(1.03	)			(1.07	)			(1.13	)
Operating Netback		$	29.26			$	25.71			$	28.49			$	25.73

Light Crude Netbacks ($  per Bbl)

		Three months ended								Six months ended
		June 30, 2005				June 30, 2004				June 30, 2005				June 30, 2004
Sales Price		$	56.44			$	42.46			$	55.45			$	41.50
Other production income			0.52				0.74				0.47				0.62
GORR Royalties			(1.15	)			(0.67	)			(0.90	)			(0.66	)
			55.81				42.53				55.02				41.46
Other income			0.51				0.63				0.44				0.54
Crown and Freehold Royalties			(8.81	)			(5.91	)			(7.66	)			(4.65	)
Operating costs			(11.14	)			(8.35	)			(10.94	)			(7.92	)
Transportation Costs			(0.30	)			(0.23	)			(0.30	)			(0.23	)
Amortization of injectants			(3.13	)			(2.54	)			(3.03	)			(2.60	)
Operating Netback		$	32.94			$	26.13			$	33.53			$	26.60

Heavy Oil Netbacks ($  per Bbl)

		Three months ended								Six months ended
		June 30, 2005				June 30, 2004				June 30, 2005				June 30, 2004
Sales Price		$	30.32			$	30.19			$	27.27			$	30.19
GORR Royalties			(0.14	)			(0.27	)			(0.10	)			(0.27	)
			30.18				29.92				27.17				29.92
Other income			0.49				—				0.75				—
Crown and Freehold Royalties			(4.61	)			(4.38	)			(3.54	)			(4.38	)
Operating costs			(15.88	)			(7.92	)			(17.26	)			(7.92	)
Operating Netback		$	10.18			$	17.62			$	7.12			$	17.62

Natural Gas Netbacks ($  per Mcf)

		Three months ended								Six months ended
		June 30, 2005				June 30, 2004				June 30, 2005				June 30, 2004
Sales Price		$	7.34			$	7.08			$	7.09			$	6.96
GORR Royalties			(0.18	)			(0.15	)			(0.14	)			(0.14	)
			7.16				6.93				6.95				6.82
Other income			0.44				0.17				0.32				0.20
Crown and Freehold Royalties			(1.16	)			(1.05	)			(1.16	)			(1.05	)
Operating costs			(1.16	)			(1.38	)			(1.12	)			(1.32	)
Transportation Costs			(0.09	)			(0.11	)			(0.09	)			(0.10	)
Operating Netback		$	5.19			$	4.56			$	4.90			$	4.55

— 8 — PENGROWTH ENERGY TRUST

NGL Netbacks ($  per Bbl)

		Three months ended								Six months ended
		June 30, 2005				June 30, 2004				June 30, 2005				June 30, 2004
Sales Price		$	50.03			$	40.75			$	50.26			$	39.16
GORR Royalties			(1.02	)			(0.77	)			(0.84	)			(0.82	)
			49.01				39.98				49.42				38.34
Crown and Freehold Royalties			(13.57	)			(11.13	)			(13.48	)			(13.19	)
Operating costs			(9.15	)			(8.24	)			(7.98	)			(7.92	)
Transportation Costs			—				(0.09	)			—				(0.09	)
Operating Netback		$	26.29			$	20.52			$	27.96			$	17.14

General and Administrative

General and administrative expenses (G&A) were $7.1 million ($1.35 per boe) in the second quarter of 2005 compared to $5 million ($1.07 per boe) for the second quarter of 2004. For the six months ended June 30, 2005, G&A expenses were $14.2 million ($1.34 per boe) compared to $10.8 million ($1.23 per boe) for the same period last year. Included in 2005 second quarter G&A is $0.7 million of non-cash compensation costs related to trust unit rights and Deferred Entitlement trust units (see note 1 to consolidated financial statements) compared to $0.3 million for the second quarter of 2004. The year-to-date non-cash component is $1.5 million compared to $1.4 million for the first six months of 2004. Excluding the non-cash component of G&A, 2005 year-to-date G&A has increased over 2004 levels by $3.2 million mainly due to the addition of personnel and office space required to manage the Murphy acquisition.

Management Fees

Management fees were $4.3 million ($0.82 per boe) for the second quarter of 2005 compared to $5.6 million ($1.20 per boe) for the second quarter of 2004. For the six month period, management fees were $8.1 million ($0.76 per boe) for 2005 compared to $8.4 million ($0.95 per boe) in 2004.

Management fees recorded in the second quarter of 2005 include an accrual for estimated performance fees of $2.3 million. Under the current management agreement, which came into effect July 1, 2003, the manager will earn a performance fee if Pengrowth trust unit total returns exceed eight percent per annum on a three year rolling average basis. However, the maximum fees payable, including the performance fee, is limited to 80 percent of the fees that would otherwise have been payable under the old management agreement for the first three years and 60 percent for the subsequent three years. Management fees have decreased from 2004 due mainly to the 80 percent maximum fee calculation being lower in 2005.

Interest

Interest expense decreased to $5.7 million in the second quarter of 2005 compared to $7.8 million for the second quarter of 2004 due to the absence of bank fees of $2.3 million incurred to establish the bridge facility used to finance the Murphy acquisition. For the first six months of 2005, interest expense was $11.1 million compared to $11.9 million for the same period of 2004. Interest expense includes $0.8 million of fees on a year-to-date basis related to the amortization of U.S. debt issue costs and imputed interest on the note payable to Emera Offshore Incorporated.

Depletion and Depreciation

Depletion and depreciation increased to $70.9 million in the second quarter of 2005 compared to $58.1 million in the second quarter of 2004. For the six month period, depletion and depreciation was $140.1 million compared to $108.6 million in the first half of 2004. On a per boe basis, depletion and depreciation has increased to $13.44 per boe in the second quarter of 2005 compared to $12.41 per boe in the second quarter of 2004, and $13.22 per boe on a year-to-date basis, compared to $12.29 in the first six months of 2004. The increase is mainly attributable to the purchase of properties over the past year, including the Murphy Assets in May 2004. With the sustained strength in commodity prices in recent years, the higher cost of acquiring oil and gas properties has increased the depletion rate per boe produced.

Distributions and Taxability of Distributions

Pengrowth generated $134 million ($0.86 per average trust unit outstanding) of distributable cash related to second quarter 2005 operations, compared to $99 million ($0.73 per average trust unit outstanding) in 2004. For the first six months of 2005, Pengrowth recorded $261.9 million of distributable cash compared to $191.9 million in the first six months of 2004. Distributions were $216.3 million for 2005 (2004 — $172.7 million)and as a percentage of funds generated from operations (“payout ratio”) represent approximately 83 percent (2004 — 89 percent). Pengrowth’s previous practice had been to withhold approximately 10 percent of cash available for distribution to repay debt and/or contribute to capital spending. For the second quarter of 2005, the Board of Directors resolved to maintain the existing level of distributions at $0.23 per trust unit. Given the level of commodity prices during the quarter, this action resulted in an increase in cash available to help fund Pengrowth’s capital expenditures. Pengrowth currently expects

PENGROWTH ENERGY TRUST — 9 —

monthly distributions to remain at $0.23 per trust unit for the third quarter of 2005 up to and including the November 15, 2005 distribution.

Cash distributions are paid to unitholders on the 15^th day of the second month following the month of production. Pengrowth paid $0.69 per trust unit as cash distributions during the second quarter of 2005.

There is no standardized measure of distributable cash and therefore distributable cash, as reported by Pengrowth, may not be comparable to similar measures presented by other trusts. In conjunction with the change to Pengrowth’s withholding practice, distributable cash as presented below may not be comparable to previous disclosures. The following table provides a reconciliation of distributable cash for the three and six month periods ended June 30, 2005 and 2004.

($thousands, except per unit amounts)		Three months ended June 30								Six months ended June 30
		2005				2004				2005				2004
Funds generated from operations			135,048				102,932				261,455				194,730
Change in deferred injectants			(217	)			(2,874	)			1,962				(819	)
Change in remediation trust funds			(269	)			(375	)			(532	)			(673	)
Amortization of deferred charges			(395	)			(473	)			(790	)			(947	)
Other			(120	)			(189	)			(244	)			(374	)
Distributable cash			134,047				99,021				261,851				191,917
Cash withheld for capital expenditures			32,810				9,902				45,592				19,194
Distributions			101,237				89,119				216,259				172,723
			134,047				99,021				261,851				191,917
Distributable cash per unit			0.86				0.73				1.69				1.47
Distributions paid or declared per unit			0.69				0.64				1.38				1.27
Payout ratio			75	%			87	%			83	%			89	%

At this time, Pengrowth anticipates that approximately 75 to 80 percent of 2005 distributions will be taxable; this estimate is subject to change depending on a number of factors including, but not limited to, the level of commodity prices, acquisitions, dispositions and new equity offerings.

Liquidity and Capital Resources

Pengrowth’s long term debt at June 30, 2005 was $461.5 million, compared to $345.4 million at December 31, 2004 and $371.8 million at June 30, 2004. During the second quarter, Pengrowth assumed approximately $20 million of new debt associated with the Crispin acquisition. Year-to-date capital expenditures, excluding acquisitions, of $74.4 million were financed through the combination of $45.6 million of cash withheld for capital expenditures, proceeds of $16.5 million from the exercise of trust unit rights and options, and positive working capital changes of $12.3 million.

Approximately $130 million of a $375 million revolving credit facility remains unutilized at June 30, 2005. In addition, Pengrowth has a $35 million demand operating line of credit. The revolving credit facility was replaced on July 26, 2005 with a $470 million revolving credit facility which will revolve until June 16, 2006. Details of the new facility are disclosed in Note 2 to the financial statements. The remainder of Pengrowth’s debt outstanding at the end of the second quarter 2005 is U.S. dollar denominated fixed rate term debt, details of which are provided in Note 2 to the financial statements. Due to the increase in the value of the U.S. dollar relative to the Canadian dollar, an unrealized loss of $3.2 million has been recorded in the quarter ended June 30, 2005 on the U.S. dollar denominated debt with a total unrealized gain of $45.2 million recorded since the debt issuance in April 2003.

At the end of the second quarter of 2005, Pengrowth was capitalized with 14 percent net debt (long-term debt less working capital) and 86 percent equity, as compared with 21 percent debt and 79 percent equity at the end of the second quarter of 2004 (based on quarter-end market capitalization). The Trust’s net debt to annualized second quarter 2005 cash flow from operations was approximately 1.1 times as compared to 1.7 times at the end of the second quarter of 2004 when additional debt in the form of a bridge facility existed as a result of the Murphy acquisition.

— 10 — PENGROWTH ENERGY TRUST

As of August 3, 2005, the number of trust units outstanding was approximately:

		(000’s)
Class A trust units			77,511
Class B trust units			81,079
Undeclared trust units			48
Total			158,638

As of August 3, 2005, the number of trust unit options, rights and Deferred Entitlement trust units was approximately:

		(000's)
Trust unit options			623
Rights incentive options			1,778
Deferred Entitlement trust units			163

Acquisitions

On April 29, 2005, Pengrowth closed the acquisition of all of the issued and outstanding shares of Crispin Energy Inc. The acquisition added estimated proved plus probable reserves of about 5.2 million boe. The acquisition was funded by issuing approximately 677,000 Class A trust units and approximately 3,552,000 Class B trust units valued at $88 million.

Also during 2005, Pengrowth successfully completed the acquisition of an additional 11.89 percent working interest in the Swan Hills Unit No. 1 property for $87 million which was funded through additional debt.

Capital Spending

Capital expenditures for the six months ending June 30, 2005 totaled $74.4 million including $18.3 million at Judy Creek, $9.5 million at SOEP, $6.3 million at Buick, $4.1 million at Squirrel, $3.6 million at Weyburn and $3 million at Swan Hills.

Pengrowth expects to spend a total of approximately $140 million on maintenance and development activities in the remaining two quarters of 2005 for a total revised capital program of approximately $215 million for full year 2005. This represents an increase of $10 million from Pengrowth’s previous guidance of $205 million provided in the first quarter report and reflects an increase in development activity planned at Pengrowth’s Weyburn and Princess properties as well as additional development drilling and facilities in Northeast British Columbia. Approximately 83 percent of the first six month’s capital expenditures have been funded from withheld cash and proceeds from trust unit rights and options exercised.

Summary of Quarterly Results

The following table is a summary of quarterly results for 2003, 2004 and the first two quarters of 2005. Net income and net income per unit decreased quarter over quarter by approximately six percent and eight percent, respectively. The decrease is attributable to a two percent decrease in production volume, particularly the decrease in SOEP condensate shipments as well as the absence of a favorable first quarter prior period future tax expense adjustment, partly offset by a five percent increase in average per boe price realized.

		2005								2004
		Q1				Q2				Q1				Q2				Q3				Q4
Oil and gas sales ($000’s)			236,768				247,903				165,880				193,637				222,848				218,835
Net income ($000’s)			56,314				53,106				38,652				32,684				51,271				31,138
Net income per unit ($)			0.37				0.34				0.31				0.24				0.38				0.23
Net income per unit — diluted ($)			0.37				0.34				0.31				0.24				0.38				0.23
Distributable Cash ($000’s)			127,804				134,047				92,895				99,021				104,304				104,598
Actual distributions paid or declared per unit ($)			0.69				0.69				0.63				0.64				0.67				0.69
Daily production (boe)			59,082				57,988				45,668				51,451				60,151				57,425
Total Production (mboe)			5,317				5,277				4,156				4,682				5,534				5,283
Average realized price per boe ($  per boe)			44.53				46.98				39.91				41.36				40.27				41.42
Operating netback per boe ($  per boe)			27.70				28.45				25.71				25.71				22.77				24.31

PENGROWTH ENERGY TRUST — 11 —

		2003
		Q1				Q2				Q3				Q4
Oil and gas sales ($000’s)			204,824				169,238				162,819				154,140
Net income ($000’s)			62,920				54,214				34,808				37,355
Net income per unit ($)			0.57				0.49				0.29				0.31
Net income per unit — diluted ($)			0.57				0.48				0.29				0.30
Distributable Cash ($000’s)			108,025				79,695				81,057				77,122
Actual distributions paid or declared per unit($)			0.75				0.67				0.63				0.63
Daily production (boe)			50,827				48,839				48,850				47,653
Total Production (mboe)			4,574				4,444				4,494				4,384
Average realized price per boe ($per boe)			44.78				38.08				36.22				35.16
Operating netback per boe ($per boe)			26.50				21.11				20.54				20.43

Outlook

Based on second quarter 2005 production results, Pengrowth expects daily average production of approximately 56,500 to 58,500 boe per day for the full year 2005. This estimate incorporates production additions from the Swan Hills and Crispin acquisitions as well as Pengrowth’s 2005 development program, offset by normal production declines.

Total operating costs for 2005 are expected to increase to approximately $200 million including a full year of costs from the Murphy Assets and those associated with the Swan Hills and Crispin acquisitions. Assuming Pengrowth’s average production results for 2005 are as forecast above, Pengrowth now estimates 2005 operating costs per boe of between $9.40 and $9.70 and combined G&A and management fees of approximately $1.91 to $1.97 per boe.

Pengrowth currently anticipates capital expenditures for maintenance and development of approximately $215 million for 2005. In addition, another $175 million was invested to complete the Swan Hills and Crispin acquisitions of which $87 million was paid in cash and the balance was paid through the issuance of Class A trust units and Class B trust units.

Assuming that current levels of commodity prices continue, subject to Board approval, Pengrowth expects monthly distributions during the third quarter will be maintained at $0.23 per trust unit which is expected to represent a 73 percent to 77 percent payout of funds from operations.

To the extent that Class A trust units in the future represent less than the ownership threshold of 49.75 percent, conversion of Class B trust units to Class A trust units is permissible under the Trust Indenture. Pengrowth proposed a new form of reservation system that was approved in principle by unitholders at the Annual & Special Unitholders Meeting on April 26, 2005 in order to provide all unitholders with an equal and orderly opportunity to convert Class B trust units into Class A trust units. Pengrowth is currently working with Computershare Trust Company of Canada to design an appropriate system. In addition, Pengrowth is considering all alternatives with respect to the Class A and Class B trust units in conjunction with discussions with the Department of Finance.

Pengrowth is continually evaluating its portfolio for optimization opportunities. Subsequent to the quarter end, purchase and sale agreements have been executed with several parties to acquire from Pengrowth approximately 600 boe per day of non-core properties for gross proceeds of approximately $37 million. The divestments are expected to close by August 31, 2005 and have an effective date of June 1, 2005. Pengrowth anticipates further non-core asset divestitures may be possible prior to year end 2005.

— 12 — PENGROWTH ENERGY TRUST

Operations Review

REVIEW OF DEVELOPMENT ACTIVITIES (All volumes stated below are net to Pengrowth unless otherwise stated)

Judy Creek (100% working interest)

	•		Tied in a previously abandoned oil producer that was reactivated and acid fracture stimulated in the first quarter. The initial oil rate is 160 bpd.
	•		Commenced water injection at a horizontal injector pattern scheduled for solvent injection in the third quarter. Current oil response to this water injection is 250 bopd.
	•		Solvent injection began at two new miscible patterns, replacing three patterns that completed injection during the second quarter. Oil response will be seen from these new patterns beginning in the third quarter.

Swan Hills Unit (22.34% working interest)

	•		Four additional hillslide wells were drilled in the hillslide area for a total of seven wells this year. Two of the wells have been completed and are on stream at rates averaging 100 bopd per well and the other five are undergoing either completion or testing operations. These five wells are anticipated to be on stream during the third quarter of 2005.
	•		The CO2 pilot commenced in October 2004 and the CO2 injection rate has increased from 60 mcf per day to 177 mcf per day. CO2 response is predicted to occur between six to twelve months after the start of injection.

Weyburn Unit (9.75% working interest)

•

A total of 22 new horizontal or vertical re-entries were drilled and additional legs were added to two existing horizontal wells at the end of the second quarter. Twenty of the new wells and the two horizontal wells with additional legs are on production. The average unit production rate for the second quarter was 25,925 bopd (2,528 bopd net).

Sable Offshore Energy Project (SOEP) (8.4% working interest)

Production

	•		Second quarter gross raw gas production from the five SOEP fields, Thebaud, Venture, North Triumph, Alma and South Venture averaged 392 mmcf per day ( 32.9 mmcf per day net).
	•		Monthly raw production for April, May and June was 406 mmcf per day (34.1 mmcf per day net), 371 mmcf per day (31.2 mmcf per day net), 401 mmcf per day (33.7 mmcf per day net), respectively.
	•		South Venture 2 was recompleted in an up hole zone with production starting on May 9, 2005.
	•		South Venture was completed in June with production starting on June 23, 2005.
	•		Pengrowth also had a 68,000 bbl condensate lifting in June.

Tier 2 Status

	•		Fabrication of the compression topsides, jacket and piles is approximately 15 percent complete.
	•		Cut-in work in preparation for the compressor installation is in progress at the Thebaud facilities.
	•		In-service date for the compressor is scheduled for late 2006.

Buick/Prespatou (100% working interest)

•

Construction of compressor station and sales pipeline commenced during the second quarter. Upon completion in the third quarter, the new facilities will support production from two wells drilled in the first quarter, for net initial production of 2.5 mmcf per day. The new facilities will also provide for production from additional wells which will be drilled later this year.

Oak B (58.4 % working interest)

•

Artificial lift upsize at one oil producer resulted in a net gain of 75 bopd.

McLeod River (75% working interest)

•

One gas well drilled. Completion and tie-in will proceed in the third quarter with expected initial production of just over 1 mmcf per day (gross).

Three Hills Creek (65% working interest)

•

One gas well was drilled and completed. The associated tie in is expected to proceed in the third quarter with initial production expected to be 800 mcf per day (gross).

PENGROWTH ENERGY TRUST — 13 —

Princess (100% working interest)

•

52 well shallow gas drilling program commenced late in the second quarter. Drilling, completion and tie-in operations will continue through the third quarter.

Cactus (100% working interest)

•

Installed a new booster compressor to increase gas throughput by 2 mmcf per day.

— 14 — PENGROWTH ENERGY TRUST

Consolidated Balance Sheets

		As at				As at
		June 30				December 31
(Stated in thousands of dollars)		2005				2004
		(unaudited)				(audited)
ASSETS
CURRENT ASSETS
Accounts receivable		$	104,033			$	104,228
Inventory			—				439
			104,033				104,667
REMEDIATION TRUST FUNDS			8,841				8,309
DEFERRED CHARGES (Note 6)			2,861				3,651
GOODWILL (Note 3)			182,524				170,619
PROPERTY, PLANT AND EQUIPMENT AND OTHER ASSETS			2,141,769				1,989,288
		$	2,440,028			$	2,276,534
LIABILITIES AND UNITHOLDERS’ EQUITY
CURRENT LIABILITIES
Bank indebtedness		$	14,540			$	4,214
Accounts payable and accrued liabilities			82,371				80,423
Distributions payable to unitholders			72,925				70,456
Due to Pengrowth Management Limited			4,139				7,325
Note payable			15,000				15,000
Current portion of contract liabilities			5,537				5,795
			194,512				183,213
NOTE PAYABLE			20,000				20,000
CONTRACT LIABILITIES			15,576				18,216
LONG-TERM DEBT (Note 2)			461,508				345,400
ASSET RETIREMENT OBLIGATIONS (Note 5)			183,698				171,866
FUTURE INCOME TAXES			103,350				75,628
TRUST UNITHOLDERS’ EQUITY
Trust Unitholders’ capital (Note 4)			2,488,220				2,383,284
Contributed surplus (Note 4)			3,006				1,923
Accumulated earnings			836,477				727,057
Accumulated distributions paid or declared			(1,866,319	)			(1,650,053	)
			1,461,384				1,462,211
SUBSEQUENT EVENT (Note 10)
		$	2,440,028			$	2,276,534

See accompanying notes to the consolidated financial statements.

PENGROWTH ENERGY TRUST — 15 —

Consolidated Statements of Income and Accumulated Earnings

						Three months ended								Six months ended
(Stated in thousands of dollars)						June 30								June 30
(Unaudited)						2005				2004				2005				2004
REVENUES
Oil and gas sales						$	247,903			$	193,637			$	484,671			$	359,517
Processing and other income							5,614				2,639				9,732				5,624
Crown royalties, net of incentives							(38,361	)			(27,762	)			(72,324	)			(50,783	)
Freehold royalties and mineral taxes							(4,252	)			(3,251	)			(7,709	)			(4,746	)
							210,904				165,263				414,370				309,612
Interest and other income							1,730				701				1,842				1,126
NET REVENUE							212,634				165,964				416,212				310,738
EXPENSES
Operating							50,435				38,826				99,514				69,986
Transportation							1,808				1,817				3,615				3,374
Amortization of injectants for miscible floods							5,961				4,823				11,353				10,027
Interest							5,709				7,755				11,142				11,932
General and administrative							7,125				5,003				14,206				10,849
Management fee							4,343				5,617				8,051				8,371
Foreign exchange loss (Note 7)							2,425				4,666				3,785				7,037
Depletion and depreciation							70,904				58,088				140,053				108,600
Accretion (Note 5)							3,550				2,373				6,953				4,372
							152,260				128,968				298,672				234,548
NET INCOME BEFORE TAXES							60,374				36,996				117,540				76,190
INCOME TAXES
Capital							1,309				833				2,606				1,375
Future							5,959				3,479				5,514				3,479
							7,268				4,312				8,120				4,854
NET INCOME						$	53,106			$	32,684			$	109,420			$	71,336
Accumulated earnings, beginning of period							783,371				611,964				727,057				573,312
ACCUMULATED EARNINGS, END OF PERIOD						$	836,477			$	644,648			$	836,477			$	644,648
NET INCOME PER UNIT (Note 4)		Basic				$	0.339			$	0.241			$	0.706			$	0.547
		Diluted				$	0.338			$	0.240			$	0.703			$	0.545

See accompanying notes to the consolidated financial statements.

— 16 — PENGROWTH ENERGY TRUST

Consolidated Statements of Cash Flow

		Three months ended								Six months ended
(Stated in thousands of dollars)		June 30								June 30
(Unaudited)		2005				2004				2005				2004
CASH PROVIDED BY (USED FOR):
OPERATING
Net income		$	53,106			$	32,684			$	109,420			$	71,336
Depletion, depreciation and accretion			74,454				60,461				147,006				112,972
Future income taxes			5,959				3,479				5,514				3,479
Contract liability amortization			(1,449	)			(824	)			(2,898	)			(824	)
Amortization of injectants			5,961				4,823				11,353				10,027
Purchase of injectants			(5,744	)			(1,949	)			(13,315	)			(9,208	)
Expenditures on remediation			(1,506	)			(979	)			(2,624	)			(2,830	)
Unrealized foreign exchange loss (Note 7)			3,160				4,500				4,680				7,460
Trust unit based compensation			712				264				1,529				1,371
Amortization of deferred charges			395				473				790				947
Funds generated from operations			135,048				102,932				261,455				194,730
Changes in non-cash operating working capital (Note 8)			(8,962	)			4,768				1,051				(108	)
			126,086				107,700				262,506				194,622
FINANCING
Distributions			(108,040	)			(85,310	)			(213,797	)			(163,529	)
Change in long-term debt, net			(4,031	)			325,000				90,969				325,000
Proceeds from issue of trust units			6,647				5,730				16,530				205,169
			(105,424	)			245,420				(106,298	)			366,640
INVESTING
Expenditures on property acquisitions			(1,616	)			(552,406	)			(91,566	)			(553,193	)
Expenditures on property, plant and equipment			(28,901	)			(38,703	)			(74,436	)			(63,565	)
Change in remediation trust fund			(269	)			(375	)			(532	)			(673	)
Change in non-cash investing working capital (Note 8)			3,192				(7,072	)			—				(2,344	)
			(27,594	)			(598,556	)			(166,534	)			(619,775	)
DECREASE IN CASH AND TERM DEPOSITS			(6,932	)			(245,436	)			(10,326	)			(58,513	)
CASH AND TERM DEPOSITS
(BANK INDEBTEDNESS) AT BEGINNING OF PERIOD			(7,608	)			251,077				(4,214	)			64,154
CASH AND TERM DEPOSITS
(BANK INDEBTEDNESS) AT END OF PERIOD		$	(14,540	)		$	5,641			$	(14,540	)		$	5,641

See accompanying notes to the consolidated financial statements.

PENGROWTH ENERGY TRUST — 17 —

Notes To Consolidated Financial Statements

(Unaudited)
June 30, 2005

(Tabular dollar amounts are stated in thousands of dollars except per unit amounts)

1.		SIGNIFICANT ACCOUNTING POLICIES
		The interim consolidated financial statements of Pengrowth Energy Trust include the accounts of Pengrowth Energy Trust, Pengrowth Corporation and its subsidiaries (collectively referred to as “Pengrowth”). The financial statements have been prepared by management in accordance with accounting principles generally accepted in Canada. The 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, 2004. The disclosures provided below are incremental to those included with the annual consolidated financial statements. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto in Pengrowth’s annual report for the year- ended December 31, 2004.
		LONG-TERM INCENTIVE PLAN
		Effective January 1, 2005, Pengrowth established a new long-term incentive plan whereby rights incentive options and restricted share units (“Deferred Entitlement trust units”) are granted under the plan. The terms of the rights incentive options are consistent with the existing Trust Units Rights Incentive Plan. Compensation expense related to rights incentive options is based on a fair value method using a modified Black Scholes model described in Note 10 of the consolidated financial statements for the fiscal year- ended December 31, 2004.
		The terms of the Deferred Entitlement trust units are described in Note 4. Compensation expense related to Deferred Entitlement trust units is based on the fair value of the Deferred Entitlement trust units at the date of grant. The number of Class B trust units awarded at the end of the vesting period is subject to certain performance conditions. Compensation expense incorporates the estimated fair value of the Deferred Entitlement trust units at the date of grant and an estimate of the relative performance multiplier. Fluctuations in compensation expense may occur due to changes in estimating the outcome of the performance condition. An estimate of forfeiture has not been made; rather compensation expense is reduced for actual forfeitures as they occur. Compensation expense is recognized in income over the vesting period with a corresponding increase or decrease to contributed surplus. Upon issuance of the Class B trust units at the end of the vesting period, trust unitholders’ capital is increased and contributed surplus is reduced.
2.		LONG-TERM DEBT

		As at				As at
		June 30,				December 31,
		2005				2004
U.S. dollar denominated debt:
U.S. $150 million senior unsecured notes at 4.93% due April 2010		$	183,810			$	180,300
U.S. $50 million senior unsecured notes at 5.47% due April 2013			61,270				60,100
			245,080				240,400
Canadian dollar revolving credit borrowings			216,428				105,000
		$	461,508			$	345,400