Accomplishments/Financial Update:

— The trust concluded an equity offering of 15.5 million trust units at CAD16.35 per unit for net proceeds of CAD240 million during the quarter. Proceeds of the offering were applied against the trust’s debt resulting in a net debt balance of CAD781.5 million at March 31, 2009, a reduction of CAD180.4 million from year end

— On April 14, 2009, the trust announced the closing of a private placement of long-term debt in the form of senior secured notes totaling $125 million at a blended average interest rate of 7.47%. The notes were offered in three tranches with repayment dates between 2012 and 2021 allowing the trust to change a portion of its credit facility debt to long term notes that mature more than a number of years as opposed to being re-financed all in one year

Proceeds from the notes were used to decrease the debt outstanding on the trust’s CAD800 million credit facility to CAD356 million, providing the trust with CAD444 million of undrawn debt capacity on the bank line. The trust also has CAD167 million accessible to it through the undrawn portion of a shelf facility with a large insurance company

— The trust carried out a CAD97.2 million capital expenditure program in the first quarter of 2009 that comprised drilling 81 gross wells on operated properties, resulting in 14 oil wells, 66 natural gas wells and a 99% success rate. Of the 81 wells drilled in the first quarter, the trust now has 33 wells waiting on tie-in, of which 24 wells are awaiting completion. The capital expenditures were 64% funded by cash flow from operating activities and proceeds from the DRIP program and the remaining portion was funded through debt

— Production for the quarter was on budget at 64,872 boe per day with record production at Dawson and Ante Creek. With the decrease in the 2009 capital budget, the trust now anticipates full year production to average between 62,000 and 64,000 boe per day at an operating cost of about CAD10.70 per boe

— In light of the weak commodity price environment, particularly for natural gas, the monthly distribution has been declined to CAD0.10 per unit effective with the May 2009 distribution payable on June 15, 2009. The board has also approved a reduced capital expenditure budget for the trust of CAD350 million while affirming its commitment to the construction of a 60 mmcf per day gas plant to be completed late in the first quarter of 2010 for the Dawson field contingent on the timely receipt of regulatory approvals

— The trust’s current plans are to convert to a dividend paying corporation effective December 31, 2010. At this time, management believes that this will be most logical and tax efficient alternative for ARC unitholders. The potential conversion will be subject to regulatory and unitholder approval

Montney Resource Play Development

During the first quarter of 2009, the trust spent CAD36.3 million on development activities in the Dawson area comprising the drilling of five horizontal wells, two of which were concluded and tested during the quarter. Vertical wells were also drilled at Sundown and Pouce Coupe.

With the completion of a third party compressor in the middle of February 2009, total output from the Dawson area grew to an average of 51.2 mmcf per day in the first quarter of 2009 and exited the quarter at about 56 mmcf per day.

The trust continues to work towards a late first quarter 2010 completion date for a new 60 mmcf per day gas plant for Dawson. Design work is complete, long-lead time items have been ordered and the public notification has been concluded.

Executive Overview

As at March 31, 2009, ARC Energy held interests in excess of 18,600 wells with about 5,600 wells operated by the company and the remainder operated mainly by other major oil and gas companies. ARC Energy’s production has averaged between 61,000 and 67,000 boe per day in each quarter for the last three years. The total capitalization of ARC Energy, which trades on the Toronto stock exchange, as at March 31, 2009 was CAD4.1 billion.

ARC Energy’s objective as an energy company is to give superior and sustainable long-term returns to unitholders. Key attributes of the business plan comprises:

— Concentrated activities in three major business areas: conventional oil and natural gas assets, resource plays and enhanced oil recovery initiatives. In addition to these major initiatives, ARC Energy continually assesses acquisition and disposition opportunities to high-grade its asset base and provide future growth opportunities

— Pay a portion of cash flow to unitholders. At present the trust distributes CAD0.12 per unit per month but due to existing oil and natural gas prices the distribution amount has been decreased to CAD0.10 per unit per month starting with the May 2009 distribution to be paid on June 15, 2009. The remainder of the cash flow is used to fund reclamation costs, and a portion of capital expenditures and land acquisitions. Since the trust’s inception in July 1996 to March 31, 2009, the trust has distributed CAD3.3 billion or CAD24.06 per unit

— The periodic acquisition of strategic producing and undeveloped properties to improve existing production or provide the potential for future drilling locations and if successful, additional production and reserves

— Use prudent production practices to maximize the recovery of oil and natural gas from the reservoirs

— Operational excellence for both routine operating expenditures and costs incurred for capital projects. In the existing environment ARC Energy is aggressively pursuing cost reductions throughout the business. ARC Energy anticipates that the aggregate amount of operating costs will rise over time as ARC adds about 300 wells per year to its operating base to replace the natural decline on existing producing wells

Revenue:

While oil volumes were relatively unchanged year over year, the decline in realized oil prices accounted for a CAD116.9 million decrease in revenues. Natural gas revenue decreased by CAD54.4 million, comprising a CAD48.4 million decrease due to lower prices realized in 2009 and a CAD6 million decrease due to lower volumes produced in 2009.

The sharp decline in oil prices during the fourth quarter of 2008 continued into the first quarter of 2009. $WTI prices averaged CAD43.21 throughout the first quarter of 2009, a 56% decline compared with the year-ago quarter. This dramatic decrease was partly counterbalanced by the weakening of the Canadian dollar compared to the US dollar, however, widening of the price discrepancy for the first part of the quarter further eroded the ARC Energy’s realized oil price. The trust’s oil production consists mainly of light and medium crude oil while heavy oil accounts for less than 5% of the trust’s crude oil production. The realized price for the trust’s oil, before hedging, was CAD46.44 per boe, a 48% reduction over the first quarter 2008 realized price of CAD89.72 per boe.