Review of Consolidated Results

Consolidated results compared to the prior year’s annual report Outlook

The Trust provides estimates of its anticipated financial and operating results for the next fiscal year in our annual report, and we revise this guidance throughout the year in our quarterly reports and information releases to reflect actual operating results and new information as it becomes available.

The Trust’s $1.1 billion funds from operations in 2006 were 15% higher than the $970 million guidance in the 2005 annual report. Higher net revenue, partially offset by a related increase in Crown royalties, was the main factor contributing to the strong 2006 performance.

Total revenues, after crude oil purchases, transportation and marketing expense, in 2006 were $2.4 billion, exceeding our Outlook estimate of $2.3 billion. The better than expected results reflected WTI prices that averaged US$66.25 per barrel, compared to our US$55 per barrel forecast. The higher crude oil prices more than offset the lower Syncrude production volumes and stronger Canadian dollar relative to our estimated $0.85 US/Cdn foreign exchange rate. Syncrude production of 94.3 million barrels was lower than our original 100 million barrel guidance. Higher Crown royalties of $232 million, compared to our estimate of $183 million, corresponded with the higher actual revenues recorded in the year.

Our operating cost estimate for 2006 was $25.88 per barrel, based on a natural gas cost of $10.78 per GJ and the 100 million barrel Syncrude annual production estimate. By October 24, 2006, we had revised our operating cost outlook to $26.29 per barrel to account for lower than anticipated production and higher natural gas consumption volumes, partially offset by a decrease in estimated 2006 natural gas prices to $6.50 per GJ. Actual costs of $27.07 per barrel were slightly higher than the revised guidance, primarily as a result of the unplanned maintenance on Coker 8-2, which occurred in late November and extended through to January 2007.

Actual capital expenditures in 2006 were $300 million, similar to the forecast amount of $303 million.