The construction of the Presley Pipeline and the expansion of the Kaybob North Sour Gas Plant presented the opportunity to construct a deep-cut natural gas liquids extraction facility to recover additional natural gas liquids from the liquids-rich natural gas produced to the Plant. During 2010 Trilogy had completed the process design and cost estimate to construct a 150 MMcf/d deep-cut facility adjacent to the existing Kaybob North Sour Gas Plant, with the intention of procuring equipment in 2011 and working toward start-up in the second quarter of 2012.

Subsequent to the end of the year, Trilogy announced that it had entered into a commercial arrangement with Aux Sable Canada LP (“Aux Sable”) pursuant to which Trilogy will receive additional economic value for the natural gas liquids in its liquids-rich natural gas stream originating from the Kaybob area. The initial term of the agreement is five years. While the agreement entered into with Aux Sable (the “NGL Agreement”) does not preclude Trilogy from proceeding with its previously announced plans to construct a deep-cut facility at the Kaybob North Sour Gas Plant, Trilogy is indefinitely deferring those plans at this time, as the NGL Agreement is projected to provide natural gas liquids recovery values that are at least equivalent to the value Trilogy would have received if the deep-cut facility project were to proceed after factoring in the capital, operating and other costs and risks associated with a liquids extraction facility. Trilogy anticipates that a continued mutually beneficial, long term relationship with Aux Sable under the NGL Agreement will obviate the need for Trilogy to proceed with its deep-cut facility project. The expected benefits of the NGL Agreement include the following:

• the NGL Agreement is effective January 1, 2011, allowing for immediate recovery of additional value for Trilogy’s natural gas liquids produced at Kaybob versus a Q2 2012 estimated completion date for the proposed deep-cut facility;

• based on the value sharing arrangement under the NGL Agreement and forward strip pricing, Trilogy anticipates that 2011 cash flow will increase by approximately $15 Million as compared to Trilogy’s current cash flow estimate. Assuming the contracted volumes increase to approximately 130 MMcf/d, cash flow under the NGL Agreement may reach $30 to $40 Million per year with a total of approximately $170 Million over the initial five year term of the NGL Agreement;

• pricing under the NGL Agreement is calculated with reference to the U.S. natural gas liquids market, allowing Trilogy to access a larger, more liquid, higher priced market;

• eliminates 2011 and 2012 planned capital expenditures of approximately $55 Million to install a new cryogenic deep-cut functional unit and related equipment at the Kaybob North Sour Gas Plant;

• operating cost savings of approximately $2.5 Million per year at the Plant and transportation cost savings of approximately $3.0 Million to transport dry gas as compared to constructing the deep-cut facility;

• no increase to Trilogy’s long term debt for the deep-cut facility project at the Plant; and

• mitigates risks associated with constructing and operating the deep-cut facility as well as those associated with marketing the extracted natural gas liquids.

Q1 2011 Update