Exhibit 99.1

Gibson Energy ULC

Quarterly Report

For the Three Month Period Ended March 31, 2011

1. Financial Statements

2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

1. Financial Statements

Gibson Energy Holding ULC

Condensed Consolidated Balance Sheet

(Unaudited)

(tabular amounts in thousands of Canadian dollars)

	March 31, 2011			December 31, 2010			January 1, 2010
Assets
Current assets
Cash and cash equivalents	$	51,989		$	7,225		$	26,263
Trade and other receivables	405,777			354,682			315,865
Income taxes receivable	57,130			57,130			15,541
Inventories (note 5)	158,157			197,483			113,688
Prepaid expenses and other assets	9,214			7,843			4,045
Net investment in finance leases (note 6)	236			236			—
Assets held for sale	—			33,596			—
Total current assets	682,503			658,195			475,402

Non-current assets
Deferred income tax assets	17,024			13,422			6,734
Long-term prepaid expenses and other assets	21,826			21,990			29,032
Net investment in finance leases (note 6)	20,206			20,265			—
Property, plant and equipment (note 7)	633,539			629,755			570,307
Intangible assets	145,122			152,339			121,909
Goodwill	495,157			496,416			433,894
Total non-current assets	1,332,874			1,334,187			1,161,876
Total assets	$	2,015,377		$	1,992,382		$	1,637,278
Liabilities
Current liabilities
Credit Facility (note 8)	$	—		$	43,500		$	25,000
Trade payables and accrued charges	418,404			393,686			254,869
Deferred revenue	63,985			54,701			13,405
Income taxes payable	1,583			1,217			8,443
Liabilities related to assets held for sale	—			3,762			—
Total current liabilities	483,972			496,866			301,717

Non-current liabilities
Long-term debt (note 9)	702,651			718,154			553,942
Provisions (note10)	43,172			43,251			40,623
Other long-term liabilities (note11)	6,634			6,445			5,895
Deferred income tax liabilities	196,887			182,858			190,523
Total non-current liabilities	949,344			950,708			790,983
Total liabilities	1,433,316			1,447,574			1,092,700
Equity
Share capital	668,827			664,724			650,690
Contributed surplus	14,207			13,586			8,957
Accumulated other comprehensive loss	(10,841		)	(7,342		)	—
Deficit	(90,132		)	(126,160		)	(115,069		)
Total equity	582,061			544,808			544,578
Total liabilities and shareholder’s equity	$	2,015,377		$	1,992,382		$	1,637,278
Commitments and contingencies (note12)

See accompanying notes

Gibson Energy Holding ULC

Condensed Consolidated Statement of Income

(Unaudited)

(tabular amounts in thousands of Canadian dollars)

	Three months ended March 31
	2011			2010
Revenue (note 13)	$	1,148,017		$	964,529
Cost of sales (note 14, 15 and 20)	1,104,199			938,252
Gross profit	43,818			26,277

General and administrative (note 14 and 15)	7,374			8,070
Gain on sale of Edmonton North Terminal (note 7)	(20,370		)	—
Other operating expenses (note 16)	1,176			535
Income from operating activities	55,638			17,672

Loss from investment in associates	86			504
Interest expense (note 20)	24,705			24,036
Interest income	(58		)	(216		)
Foreign exchange gain on long-term debt (note 9)	(17,328		)	(20,800		)
Income before income taxes	48,233			14,148
Income tax provision (note 17)	8,102			3,167
Net income	$	40,131		$	10,981

See accompanying notes

Gibson Energy Holding ULC

Condensed Consolidated Statement of Comprehensive Income

(Unaudited)

(tabular amounts in thousands of Canadian dollars)

	Three months ended March 31
	2011			2010
Net income	$	40,131		$	10,981
Other comprehensive income (loss)
Cumulative translation adjustment, net of tax	(3,499		)	—

Other comprehensive income (loss)	(3,499		)	—
Comprehensive income	$	36,632		$	10,981

See accompanying notes

Gibson Energy Holding ULC

Condensed Consolidated Statement of Changes in Equity

(Unaudited)

(tabular amounts in thousands of Canadian dollars)

	Share capital		Contributed surplus		Accumulated other comprehensive income (loss)			Deficit			Total Equity
Balance — January 1, 2011	$	664,724	$	13,586	$	(7,342	)	$	(126,160	)	$	544,808

Net income	—		—		—			40,131			40,131
Other comprehensive income, net of tax:
Cumulative translation adjustment	—		—		(3,499		)	—			(3,499		)
Employee share options:
Value of services recognized	—		621		—			—			621
Dividends	4,103		—		—			(4,103		)	—
Balance — March 31, 2011	$	668,827	$	14,207	$	(10,841	)	$	(90,132	)	$	582,061

Balance — January 1, 2010	$	650,690	$	8,957	$	—		$	(115,069	)	$	544,578

Net income	—		—		—			10,981			10,981
Employee share options:
Value of services recognized	—		1,150		—			—			1,150
Dividends	3,371		—		—			(3,371		)	—
Balance — March 31, 2010	$	654,061	$	10,107	$	—		$	(107,459	)	$	556,709

See accompanying notes

Gibson Energy Holding ULC

Condensed Consolidated Statement of Cash Flows

(Unaudited)

(tabular amounts in thousands of Canadian dollars)

	Three months ended March 31
	2011			2010
Cash provided by (used in)
Operating activities
Income from operating activities	$	55,638		$	17,672
Items not affecting cash
Depreciation of property, plant and equipment (note 14)	16,067			12,958
Amortization of intangible assets (note 14)	7,739			5,717
Stock based compensation	621			1,150
Loss (gain) on disposal of assets	(20,468		)	4
Other	(585		)	1,185
Net (gain) loss on fair value movement of financial instruments	(3,034		)	696
Changes in items of working capital
Trade and other receivables	(61,135		)	(1,640		)
Inventories	39,263			(9,237		)
Other current assets	(1,480		)	97
Trade payables and accrued charges	21,727			16,386
Deferred revenue	9,284			(1,501		)
Income taxes paid (note 12)	(66		)	(20,106		)
Net cash provided by operating activities	63,571			23,381

Investing activities
Purchase of property, plant and equipment	(16,874		)	(7,162		)
Purchase of intangible assets	(1,515		)	(639		)
Proceeds on disposal of assets	54,495			140
Acquisitions, net of cash acquired (note 4)	—			(22,720		)
Net cash provided by (used in) investing activities	36,106			(30,381		)

Financing activities
Proceeds from long-term debt, net of debt discount (note 9)	—			200,888
Payment of debt issue costs	—			(6,544		)
Proceeds from Credit Facility (note 8)	109,000			—
Repayment of Credit Facility (note 8)	(152,500		)	(25,000		)
Interest received	58			216
Interest paid	(10,884		)	(1,972		)
Net cash provided by (used in) financing activities	(54,326		)	167,588

Effect of exchange rate on cash and cash equivalents	(587		)	(1,309		)

Net increase in cash and cash equivalents	44,764			159,279

Cash and cash equivalents — beginning of period	7,225			26,263
Cash and cash equivalents — end of period	$	51,989		$	185,542

See accompanying notes

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

1 General Information

Gibson Energy Holding ULC and its subsidiaries (together the “Company” or “Gibson”) is engaged in the movement, storage, blending, processing and marketing and distribution of crude oil, condensate, natural gas liquids and refined products. The Company is incorporated and domiciled in Canada. The address of its registered office is 1700, 440 Second Avenue SW., Calgary, Alberta, Canada.

The Company is a wholly owned subsidiary of R/C Guitar Cooperative of U.A., a Dutch co-op owned by investment funds affiliated with Riverstone Holding LLC (“Riverstone”).

2 Basis of preparation and adoption of IFRS

The Company prepares its financial statements in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”) as set out in the Handbook of the Canadian Institute of Chartered Accountants (“CICA Handbook”). In 2010, the CICA Handbook was revised to incorporate International Financial Reporting Standards (“IFRS”), and requires publicly accountable enterprises to apply such standards effective for years beginning on or after January 1, 2011. Accordingly, the Company has commenced reporting on this basis in these condensed consolidated interim financial statements.

These condensed consolidated interim financial statements have been prepared in accordance with IFRS applicable to the preparation of interim financial statements, including IAS 34 and IFRS 1. The Company has consistently applied the same accounting policies in its opening IFRS balance sheet at January 1, 2010 and throughout all periods presented, as if these policies had always been in effect. Note 22 discloses the impact of the transition to IFRS on the Company’s reported financial position, financial performance and cash flows, including the nature and effect of significant changes in accounting policies from those used in the Company’s consolidated financial statements for the year ended December 31, 2010.

The policies applied in these condensed consolidated interim financial statements are based on IFRS issued and outstanding as of May 12, 2011, the date the Board of Directors approved the statements. Any subsequent changes to IFRS, that are given effect in the Company’s annual consolidated financial statements for the year ending December 31, 2011, could result in restatement of these interim consolidated financial statements, including the transition adjustments recognized on change-over to IFRS.

These condensed consolidated interim financial statements should be read in conjunction with the Company’s Canadian GAAP annual consolidated financial statements for the year ended December 31, 2010. Note 23 discloses IFRS information for the year ended December 31, 2010 that is material to understand these condensed consolidated interim financial statements.

The Company’s condensed consolidated interim financial statements are presented in Canadian dollars, the Company’s functional currency, and all values are rounded to the nearest thousands of dollars, except where indicated otherwise. All references to $ are to Canadian dollars and references to U.S.$ are to U.S. dollars.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

3 Significant accounting policies

Basis of measurement

The consolidated financial statements have been prepared under the historical cost convention, except for the revaluation of certain financial assets and financial liabilities to fair value, including financial instruments.

Basis of consolidation

The consolidated financial statements include the results of the Company and its subsidiaries. Subsidiaries are all entities over which the Company has the power to govern the financial and operating policies. Subsidiaries are fully consolidated from the date on which control is transferred to the Company and continue to be consolidated until the date control ceases. All intercompany transactions, balances, income and expenses are eliminated on consolidation.

Investments in unincorporated joint ventures are accounted for using the proportionate consolidation method, whereby the Company’s share of revenues, expenses, assets and liabilities are included in the accounts.

Investments in associates

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture. Generally, the Company regards an investment of between 20% and 50% as an associate. The financial results of the Company’s investments in associates are included in the Company’s results according to the equity method of accounting. Subsequent to the acquisition date, the Company’s share of profits or losses of associates is recognized in the statement of income and its share of other comprehensive income (loss) of associates is included in other comprehensive income (loss).

The Company assesses at each year end whether there is any objective evidence that its interests in associates are impaired. If impaired, the carrying value is written down to its estimated recoverable amount and charged to the statement of income.

Foreign currency translation

The financial statements for each of the Company’s subsidiaries and associates are prepared using their functional currency. The functional currency is the currency of the primary economic environment in which an entity operates. The presentation and functional currency of the Company is Canadian dollars. Assets and liabilities of foreign operations are translated into Canadian dollars at the market rates existing at the balance sheet date. Operating results are translated at the average rates for the period. Exchange differences arising on the consolidation of the net assets of foreign operations are recorded in other comprehensive income (loss). On January 1, 2010, the Company did not have material foreign operations, and therefore the cumulative translation difference on January 1, 2010 was zero.

Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the transaction date. Generally, foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in currencies other than an entity’s functional currency are recognized in the statement of income.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

Business combinations and goodwill

Business combinations are accounted for using the purchase method of accounting. The cost of an acquisition is measured as the cash paid and the fair value of other assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Direct costs incurred by the Company in connection with an acquisition, such as finder’s fees, advisors, legal, accounting, valuation and other professional or consulting fees, are expensed as incurred. The acquired identifiable assets, liabilities and contingent liabilities are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the net fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognized as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired (i.e. discount on acquisition) is credited to the statement of income in the period of acquisition.

At the acquisition date, any goodwill acquired is allocated to each of the operating segments expected to benefit from the combination’s synergies. For this purpose, cash-generating units are set at one level below an operating segment. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.

Intangible assets

An intangible asset acquired as part of a business combination is measured at fair value at the date of acquisition and is recognized separately from goodwill if the asset is separable or arises from contractual or other legal rights and its fair value can be measured reliably. Intangible assets acquired separately from a business are carried initially at cost. The initial cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset.

Intangible assets with a finite life are amortized on a straight-line basis over their expected useful lives. Amortization rates are as follows:

Brands		10 years
Customer relationships		4 – 12 years
Long-term customer contracts		6 – 10 years
Non-compete agreements		2 – 10 years
Technology		3 – 5 years
Software		3 – 7 years

The expected useful lives of intangible assets are reviewed on an annual basis and, if necessary, changes in useful lives are accounted for prospectively.

Property, plant and equipment

Property, plant and equipment is stated at cost, less accumulated depreciation and accumulated impairment losses.

The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into operation, the initial estimate of any decommissioning obligation, if any, and, for qualifying assets, borrowing costs. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. Expenditures on major maintenance refits or repairs are comprised of the cost of replacement assets or parts of assets, inspection costs and overhaul costs. Where an asset or part of an asset that was separately depreciated is replaced and it is probable that future economic benefits associated with the item will flow to the Company, the expenditure is capitalized and the carrying amount of the replaced asset is derecognized. Inspection costs associated with major maintenance

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

programmes are capitalized and amortized over the period to the next inspection. All other maintenance costs are expensed as incurred.

Depreciation is charged so as to write off the cost of assets, other than assets under construction, using the straight-line method over their expected useful life.

The useful lives of the Company’s property, plant and equipment are as follows:

Buildings		10 - 20 years
Pipelines		8 - 20 years
Tanks		20 - 33 years
Equipment		3 - 20 years
Rolling stock		10 - 23 years
Plant and Equipment		3 - 25 years

The expected useful lives of property, plant and equipment, residual values and methods of amortization are reviewed on an annual basis and, if necessary, changes in useful lives are accounted for prospectively.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the statement of income in the period the item is derecognized.

Impairments

The Company carries out impairment reviews in respect of goodwill at least annually or if indicators of impairment exist. The Company also assesses at least annually whether there have been any events or changes in circumstances that indicate that property, plant and equipment, inventories and other intangible assets may be impaired and an impairment review is carried out whenever such an assessment indicates that the carrying amount may not be recoverable. Such indicators include changes in the Company’s business plans, changes in activity levels, an increase in the discount rate and evidence of physical damage. For the purposes of impairment testing, assets are grouped at the lowest levels for which there are separately identifiable cash flows. Where impairment exists, the asset is written down to its recoverable amount, which is the higher of the fair value less costs to sell and value in use. Impairments are recognized immediately in the statement of income.

The assessment for impairment entails comparing the carrying value of the asset or cash-generating unit with its recoverable amount, that is, the higher of fair value less costs to sell and value in use. Value in use is usually determined on the basis of discounted estimated future net cash flows. However, the determination as to whether and how much an asset is impaired involves management estimates on highly uncertain matters such as the outlook for global or regional market supply-and-demand conditions, future commodity prices, the effects of inflation on operating expenses and discount rates.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount that causes the asset’s recoverable amount to exceed the asset’s carrying amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been previously recognized.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

Inventories

Crude oil, diluent, natural gas liquids, natural gas, road asphalt, roofing flux, wellsite fluids, distillate and spare parts are carried at the lower of average cost and net realizable value, with cost determined using a weighted average cost method. Net realizable value is the estimated selling price less applicable selling expenses.

Financial assets

Financial assets include cash and cash equivalents, trade receivables, other receivables and other investments. The Company determines the classification of its financial assets at initial recognition. Financial assets are recognized initially at fair value, normally being the transaction price plus directly attributable transaction costs.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and current balances with banks and similar institutions which are readily convertible to cash. These are classified as “loans and receivables” with gains or losses recognized through statement of comprehensive income. Cash equivalents are short term deposits with an original maturity of 90 days or less.

Loans and receivables

Loans and receivables are non- financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortized cost using the effective interest method if the time value of money is significant. Gains and losses are recognized in income when the loans and receivables are derecognized or impaired, as well as through the amortization process. This category of financial assets includes trade and other receivables.

A provision for impairment of trade receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganization, and default or delinquency in payments (more than 60 days overdue) are considered indicators that the trade receivable may be impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognized in the statement of income. When a trade receivable is determined to be uncollectible, it is written off against the allowance account for trade receivables.

Financial liabilities

Financial liabilities include trade payables, accruals, Credit Facility and long-term debt. The group determines the classification of its financial liabilities at initial recognition. All financial liabilities are initially recognized at fair value. For interest-bearing loans and borrowings this is the fair value of the proceeds received net of issue costs associated with the borrowing. After initial recognition, financial liabilities are subsequently measured at amortized cost using the effective interest method. Amortized cost is calculated by taking into account any issue costs, and any discount or premium on settlement. Gains and losses arising on the repurchase, settlement or cancellation of liabilities are recognized respectively in interest and other revenues and finance costs. This category of financial liabilities includes trade and other payables and finance debt.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

Leases - lessee

All of the leases where the Company is the lessee are operating leases, and payments under these leases are charged to the statement of income as incurred over the life of the lease.

Leases - lessor

Contractual arrangements that transfer substantially all the risks and benefits of ownership of property to the lessee and, at the inception of the lease, the fair value of the leased property is equal to the Company’s carrying amount of the property are recorded as a net investment in a finance lease. The minimum lease payments under such arrangements are recorded at the inception of the arrangement and the finance income is recognized in a manner that produces a consistent rate of return on the investment in the finance lease and is included in revenue.

Operating lease income is recognized in the statement of income as it is earned.

Financial instruments

Financial instruments are used by the Company to manage its exposure to market risks relating to commodity prices, foreign currency exchange rates and certain operating costs.

The Company periodically enters into crude oil futures, swaps and option contracts to manage the price risk associated with sales, purchases and inventories of crude oil and petroleum products. The Company also periodically purchases foreign exchange forward contracts and options to manage foreign exchange exposures on sales to customers in the United States and the related accounts receivable and U.S. dollar denominated interest payments.

Financial instruments, used periodically by the Company to manage exposure to market risks relating to commodity prices and foreign currency exchange rates, are not designated as hedges. They are recorded at fair value and recorded on the Company’s balance sheet as either an asset, when the fair value is positive, or a liability, when the fair value is negative. Changes in fair value are recorded in the statement of income. The estimated fair value of all financial instruments is based on quoted market prices, or, in their absence, third party market indications and forecasts. Gains or losses from financial instruments related to commodity prices are recognized in cost of sales.

The Company reflects the fair value of these financial instruments based on valuation information from third parties. The calculation of the fair value of certain of these instruments is based on proprietary models and assumptions of third parties because such instruments are not quoted on an active market. Additionally, estimates of fair value may vary among different models due to a difference in assumptions applied, such as the estimate of prevailing market prices, volatility, correlations and other factors, and may not be reflective of the price at which they can be settled due to the lack of a liquid market. As a result of changes in key assumptions, the actual amounts may vary significantly from estimated amounts.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

Provisions and contingencies

Provisions are recognized when the Company has a present obligation, legal or constructive, as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where appropriate, the future cash flow estimates are adjusted to reflect risks specific to the liability.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money. Where discounting is used, the increase in the provision due to the passage of time is recognized within interest expense.

Decommissioning

Liabilities for site restoration on the retirement of assets are recognized when the Company has an obligation to restore the site, and when a reliable estimate of that liability can be made. Where an obligation exists for a new facility, this will be recognized on construction. An obligation may also crystallize during the period of operation of a facility through a change in legislation or through a decision to terminate operations. The amount recognized is the present value of the estimated future expenditure determined in accordance with local conditions and requirements. Estimated future expenditure is based on all known facts at the time and current expected plans for decommissioning. Among the many uncertainties that may impact the estimates are changes in laws and regulations, public expectations, prices and changes in technology.

A corresponding item of property, plant and equipment of an amount equivalent to the provision is also recorded. This is subsequently depreciated as part of the asset. Other than the unwinding discount on the provision, any change in the present value of the estimated expenditure is reflected as an adjustment to the provision and the corresponding item of property, plant and equipment.

Environmental expenditures and liabilities

Liabilities for environmental costs are recognized when a clean-up is probable and the associated costs can be reliably estimated. Generally, the timing of recognition of these provisions coincides with the completion of a feasibility study or a commitment to a formal plan of action. The amount recognized is the best estimate of the expenditure required. Where the liability will not be settled for a number of years, the amount recognized is the present value of the estimated future expenditure. Estimated future expenditure is based on all known facts at the time and an assessment of the ultimate outcome. A number of factors affect the cost of environmental remediation, including the determination of the extent of contamination, the length of time remediation may require, the complexity of environmental regulations and the advancement of remediation technology.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

Employee benefits

Defined benefit pension plans and post retirement benefits

The estimated future cost of providing defined benefit pension and other post-retirement benefits (“OPRB”) is actuarially determined using the projected unit credit method and the Company’s best estimates of demographic and financial assumptions, and such cost is accrued proportionately from the date of hire of the employee to the date the employee becomes fully eligible to receive the benefits. The discount rate used to determine accrued benefit obligations is based on a year-end market rate of interest for high-quality debt instruments with cash flows that match the timing and amount of expected benefit payments.

Defined contribution pension plans

The Company’s defined contribution plans are funded as specified in the plans and the pension expense is recorded as the benefits are earned and become payable.

Share-based payments

The fair value of employee stock option plans is measured at the date of grant of the option using the Black-Scholes model. The resulting cost, as adjusted for the expected and actual level of vesting of the options, is expensed over the period in which the options vest. At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to which the vesting period has expired and an estimate of the number of equity instruments that will ultimately vest.

The movement in the cumulative expense since the previous balance sheet date is recognized in the statement of income with a corresponding adjustment to contributed surplus.

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable and it requires the input of highly subjective assumptions. Expected volatility of the Company’s shares is based on comparable companies in the industry because the Company does not have historical volatility data for its own stock. The expected term of options represents the period of time that options granted are expected to be outstanding. The risk-free rate is based on the Government of Canada’s Canadian Bond Yields with a remaining term equal to the expected life of the options used in the Black-Scholes valuation model. In the future, as the Company gains historical data for volatility in its own stock and the actual term over which employees hold its options, expected volatility and expected term may change, which could substantially change the grant-date fair value of future awards of stock options and, ultimately, the expense the Company records.

Termination benefit

The Company recognizes termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal, or providing benefits as a result of an offer made to encourage voluntary termination.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

Income taxes

Income tax expense represents the sum of the income tax currently payable and deferred income tax. Interest and penalties relating to income tax are also included in income tax expense.

The income tax currently payable is based on the taxable income for the period. Taxable income differs from net income as reported in the statement of income because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The Company’s liability for current income tax is calculated using income tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred income tax is provided for using the liability method of accounting. Deferred income tax assets and liabilities are determined based on differences between the financial reporting and income tax basis of assets and liabilities. These differences are then measured using enacted or substantially enacted income tax rates and laws that will be in effect when these differences are expected to reverse. The effect of a change in income tax rates on deferred income tax assets and liabilities is recognized in income in the period that the change occurs.

The Company is entitled to investment tax credits (‘‘ITCs’’) based on certain research and experimental development costs incurred. Investment tax credits and other cost recoveries related to property, plant and equipment are credited against the book value of property, plant and equipment and the credit is released to income on a straight-line basis as a reduction of amortization expense over the above mentioned estimated useful lives of the relevant assets.

Income tax in interim periods is accrued using the tax rate that would be applicable to expected annual earnings.

The computation of the Company’s income tax expense involves the interpretation of applicable tax laws and regulations in many jurisdictions. The resolution of tax positions taken by the Company can take significant time to complete and in some cases it is difficult to predict the ultimate outcome. In addition, the Company has carry-forward tax losses in certain taxing jurisdictions that are available to offset against future taxable income. However, deferred tax assets are recognized only to the extent that it is probable that taxable income will be available against which the unused tax losses can be utilized. Management judgement is exercised in assessing whether this is the case. To the extent that actual outcomes differ from management’s estimates, income tax charges or credits may arise in future periods.

Revenue recognition

Product revenues associated with the sales of crude oil, diluent, asphalt, natural gas liquids, natural gas, wellsite fluids and distillate owned by the Company are recognized when significant risks and rewards of ownership passes to the customer and physical delivery occurs, the price can be measured reliably and collection is probable. Sales terms are generally FOB shipping point, in which case the sales are recorded at the time of shipment, because this is when title and risk of loss are transferred. All payments received before delivery are recorded as deferred revenue and are recognized as revenue when delivery occurs, assuming all other criteria are met. Freight costs billed to customers are recorded as a component of revenue. Revenues from buy/sell transactions whereby the Company acts as an agent are recorded on a net basis.

Revenue associated with the provision of transportation and terminalling and pipeline services are recognized when the services are provided, the price can be measured reliably and collection is probable. Revenue from non-refundable propane tank fees are recorded in deferred revenue and recognized in revenue on a straight line basis over the rental period, typically one year.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

Excise taxes are reported gross within sales and other operating revenues and taxes other than income taxes, while other sales and value-added taxes are recorded net in operating expenses.

Interest

Interest income and expense is recognized in the statement of income using the effective interest rate method. Interest income and expense is classified as a financing activity in the consolidated statement of cash flows.

Borrowing costs

Borrowing costs that arise in connection with the construction of a qualifying asset are capitalized and subsequently amortized in line with the depreciation of the related asset. Borrowing costs are capitalized from the beginning of construction until the point at which the qualifying asset is substantially ready for its intended use. All other borrowing costs are recognized as interest expense in the statement of income in the period incurred.

Debt issue costs

Costs arising on the issue of new loan facilities are deferred and amortized through interest expense using the effective interest rate method.

Share capital

Common and preferred shares are classified as equity. Incremental costs directly attributable to the issuance of shares are recognized as a deduction from equity.

Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual outcomes could differ from those estimates.

The significant estimates and assumptions used are in determining the recoverability of the carrying value of goodwill, intangible assets and property, plant and equipment, the useful lives of intangible assets and property, plant and equipment, income taxes, decommissioning obligations, remediation liability and the valuation of stock options. Details of significant estimate and judgements made for these areas are included in the related accounting policies.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for resource allocation and assessing performance of the operating segments, has been identified as the President and Chief Executive Officer.

Recent accounting pronouncements

The IASB intends to replace IAS 39, “Financial Instruments: Recognition and Measurements” (“IAS 39”) with IFRS 9, “Financial Instruments” (“IFRS 9”). IFRS 9 will be published in three phases, of which the first phase has been published.

The first phase addresses the accounting for financial assets and financial liabilities. The second phase will address the impairment of financial instruments, and the third phase will address hedge accounting.

For financial assets, IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, and replaces the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. For financial liabilities, although the classification criteria for financial liabilities will not change under IFRS 9, the approach to the fair value option for financial liabilities may require different accounting for changes to the fair value of a financial liability as a result of changes to an entity’s own credit risk.

IFRS 9 is effective for annual periods beginning on or after January 1, 2013 with different transitional arrangements depending on the date of initial application. The Company is currently evaluating the impact of adopting IFRS 9 on our consolidated financial statements.

4 Business acquisitions

The following acquisitions relate to acquisitions of companies that operate within the same business segments of the Company and will provide the Company an expanded client base within these industries.

Aarcam Propane & Construction Heat Ltd.

On February 1, 2010, the Company purchased 100 percent of the common shares of Aarcam Propane & Construction Heat Ltd. (“Aarcam”) a propane retailer in Calgary, for cash, net of cash acquired, of $3.4 million. Acquisition costs relating to external legal fees and due diligence costs were not material. This acquisition will further expand the Company’s market presence and provide the Company with an expanded client base. This acquisition was accounted for using the purchase method with the results from operations included in these financial statements from the date of acquisition.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

The net assets acquired have been recorded as follows:

	Fair Value

Property, plant and equipment	$	1,628
Trade receivables	864
Inventory	55
Goodwill (1)	860
Intangible assets (2)	922
Trade payables and accrued charges	(362		)
Future income taxes	(530		)
Net assets acquired	$	3,437

(1) The amount of purchased goodwill is not expected to be deductible for tax purposes.

(2) Consists of non-compete agreement of $0.6 million and customer relationships of $0.3 million.

The goodwill is attributable to the synergies expected to be achieved from integrating the acquired company into the Company’s existing business.

The trade receivables are comprised of gross contractual amounts of $0.9 million, none of which were expected to be uncollectible at the acquisition date.

Included in the purchase price is contingent consideration of $0.5 million which represents its fair value at the acquisition date. This consideration is payable if certain earnings targets are met over the next three years.

Johnstone Tank Trucking Ltd.

On January 31, 2010, the Company purchased 100 percent of the common shares of Johnstone Tank Trucking Ltd. (“Johnstone”) for cash, net of cash acquired, of $21.3 million. Acquisition costs relating to external legal fees and due diligence costs were not material. Johnstone Tank Trucking provides fluid hauling, acid hauling, vacuum service and pressure trucking for the oil and gas industry across southern Saskatchewan. This acquisition will further expand the Company’s market presence and provide access to activity related to the Bakken oilfields. This acquisition was accounted for using the purchase method with the results from operations included in these financial statements from the date of acquisition.

The net assets acquired have been recorded as follows:

	Fair Value

Property, plant and equipment	$	7,892
Trade receivables	4,395
Inventory	141
Prepaid expenses	352
Goodwill (1)	6,656
Intangible assets (2)	7,687
Trade payables and accrued charges	(2,638		)
Future income taxes	(3,219		)
Net assets acquired	$	21,266

(1) The amount of purchased goodwill is not expected to be deductible for tax purposes.

(2) Consists of non-compete agreement of $6.0 million and customer relationships of $1.6 million.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

The goodwill is attributable to the synergies expected to be achieved from integrating the acquired company into the Company’s existing business.

The trade receivables are comprised of gross contractual amounts of $4.4 million, none of which were expected to be uncollectible at the acquisition date.

Included in the purchase price is contingent consideration of $0.6 million, which represents its fair value at the acquisition date. This consideration is payable if certain earnings targets are met in the year following the acquisition. These targets were met and the amount was paid in full in the three months ended March 31, 2011.

In the three months ended March 31, 2011 and 2010, the acquisition of Johnstone contributed revenue of $4.4 million and $3.4 million, respectively, and net income of $0.1 million and $0.7 million, respectively. As a result of the integration of Aarcam into the operations of the Company, it is considered impractical to determine the impact on revenue and net income. However, management estimates that the impact would not have been material.

5 Inventories

	March 31, 2011		December 31, 2010

Crude oil	$	102,327	$	131,007
Diluent	8,777		6,788
Asphalt	31,326		25,865
Natural gas liquids	7,203		21,000
Natural gas	30		20
Wellsite fluids and distillate	5,839		10,303
Spare parts and other	2,655		2,500
	$	158,157	$	197,483

The cost of the inventory sold included in cost of sales was $900.5 million and $837.1 million for the three months ended March 31, 2011 and 2010, respectively.

6 Net investment in finance leases

The following summarizes the Company’s net investment in arrangements whereby the Company has entered into fixed term contractual arrangements to allow customers to have dedicated use of certain tanks owned by the Company and which are accounted for as finance leases:

	March 31, 2011			December 31, 2010

Total minimum lease payments receivable	$	90,662		$	91,956
Unearned income	(70,220		)	(71,455		)
	20,442			20,501
Less: current portion	236			236
Net investment in finance lease: non-current portion	$	20,206		$	20,265

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

7 Property, plant and equipment

	Land & Buildings			Pipelines		Tanks			Rolling Stock			Plant & Equipment			Work in Progress			Total
Cost:
At January 1, 2011	$	70,006		$	87,247	$	198,412		$	168,404		$	210,614		$	13,088		$	747,771
Additions	42			1,521		1,557			9,502			3,260			6,038			21,920
Disposals	(19		)	—		(145		)	(1,198		)	(48		)	(16		)	(1,426		)
Effect of movements in exchange rates	(20		)	—		(180		)	(872		)	(197		)	(6		)	(1,275		)
At March 31, 2011	$	70,009		$	88,768	$	199,644		$	175,836		$	213,629		$	19,104		$	766,990

Accumulated depreciation and impairment:
At January 1, 2011	$	7,855		$	17,499	$	16,808		$	37,355		$	38,499		$	—		$	118,016
Depreciation	927			2,081		2,721			5,855			4,483			—			16,067
Disposals	(6		)	—		(48		)	(392		)	(17		)	—			(463		)
Effect of movements in exchange rates	(2		)	—		(15		)	(147		)	(5		)	—			(169		)
At March 31, 2011	$	8,774		$	19,580	$	19,466		$	42,671		$	42,960		$	—		$	133,451

Carrying amounts:
At January 1, 2011	$	62,151		$	69,748	$	181,604		$	131,049		$	172,115		$	13,088		$	629,755
At March 31, 2011	61,235			69,188		180,178			133,165			170,669			19,104			633,539

Additions to property, plant and equipment includes capitalization of interest of $0.2 million and $0.3 million for the three months ended March 31, 2011 and 2010, respectively.

In the year ended December 31, 2010, the Company reclassified $32.6 million of property, plant and equipment to assets held for sale, which related to the Edmonton North Terminal. In the three months ended March 31, 2011, the Company completed the sale of the Edmonton North Terminal to Pembina Midstream Limited Partnership for total consideration of $54.3 million, and recorded a gain of $20.4 million. As part of the total consideration received, the Company received pipeline assets valued at $0.9 million that will provide access to crude oil streams within the Edmonton area and assumed obligations related to these assets. Transaction costs related to the sale of $1.4 million were expensed and are included as part of the gain on sale of Edmonton North Terminal.

8 Credit Facility

The Company has established with its lenders a revolving credit facility of up to U.S.$200.0 million (the “Credit Facility”), the proceeds of which are available to provide financing for working capital and other general corporate purposes.

The Credit Facility has a term of four years expiring on December 12, 2012. Borrowings under the Credit Facility bear interest at a rate equal to, at the Company’s option, either at LIBOR, the lenders prime rate, the Bankers Acceptance rate or the Above Bank Rate, plus an applicable margin based on a pricing grid. The Company has no amounts drawn against the Credit Facility as at March 31, 2011 and had drawn $43.5 million against the Credit Facility as at December 31, 2010. In addition, the Company has issued letters of credit totalling $82.6 million and $59.2 million as at March 31, 2011 and December 31, 2010, respectively.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

Any borrowings under the Credit Facility are secured by the Company’s current assets, including, but not limited to, inventory and accounts receivable.

At March 31, 2011 and December 31, 2010, the Company had restricted cash of $0.5 million and $6.1 million, respectively. The cash is restricted because it has been posted as collateral for certain of the Company’s marketing activities.

9 Long-term debt

Long-term debt consists of the following:

	March 31, 2011			December 31, 2010

First Lien Senior Secured Notes	$	544,208		$	556,976
Senior Notes	194,360			198,920
Debt issue costs and other	(35,917		)	(37,742		)
	$	702,651		$	718,154

On May 27, 2009, the Company issued First Lien Senior Secured Notes (the “First Lien Notes”) in an aggregate principal amount of U.S.$560.0 million. The First Lien Notes have an original term of five years expiring on May 27, 2014, and accrue interest at 11.75% per annum. Throughout the term of the First Lien Notes and under certain conditions, the Company has the option to prepay the principal on the First Lien Notes, at a premium. All borrowings under the First Lien Notes are collateralized by substantially all of the property and equipment and all equity interests.

On January 19, 2010 the Company issued 10.00% unsecured Senior Notes (the “Senior Notes”) in an aggregate principal amount of U.S.$200.0 million. The Senior Notes have an original term of eight years expiring on January 19, 2018, and accrue interest at 10.00% per annum. Throughout the term of the Senior Notes and under certain conditions, the Company has the option to prepay the principal on the Senior Notes, at a premium.

The effective interest rate on the long-term debt, excluding the accretion of debt issuance costs, was 11.0%, and 11.2% for the three months ended March 31, 2011 and 2010 respectively.

In the three months ended March 31, 2011 and 2010, as a result of the movement in exchange rates, the Company recorded a foreign exchange gain on the translation of the U.S. dollar denominated long-term debt of $17.3 million and $20.8 million, respectively.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

10 Provisions

The aggregate carrying amounts of the obligation associated with site restoration on the retirement of assets and environmental costs are as follows:

	Three months ended March 31, 2011			Year ended December 31, 2010
Opening balance	$	43,251		$	40,623
Provisions reversed	(461		)	(762		)
Assumed in a business combination	—			2,905
Effect of changes in foreign exchange rates	(16		)	(26		)
Unwinding of discount	398			1,543
Reclassified to liabilities related to assets held for sale	—			(1,032		)
Closing balance	$	43,172		$	43,251

The Company currently estimates the total undiscounted future value amount, including an inflation factor of 2%, of estimated cash flows to settle the future liability for asset retirement and remediation obligations to be approximately $164.9 million at March 31, 2011. In order to determine the current provision related to these future values, the estimated future values are discounted using a risk-free rate of 4%. The provision is expected to be settled up to 40 years into the future.

The Company is not aware of any potential unasserted environmental remediation claims that may be brought against it. Accruals are recorded when environmental remediation is probable and the costs can be reasonably estimated. A number of factors affect the cost of environmental remediation, including the determination of the extent of contamination, the length of time remediation may require, the complexity of environmental regulations and the advancement of remediation technology. Considering these factors, the Company has estimated the costs of remediation, which will be incurred in future years. The Company believes the provisions made for environmental matters are adequate, however it is reasonably possible that actual costs may exceed the estimated accrual, if the selected methods of remediation do not adequately reduce the contaminates and further remedial action is required.

11 Other long-term liabilities

	March 31, 2011		December 31, 2010

Post-retirement benefits	$	4,021	$	3,958
Accrued pension liability	2,613		2,487
	$	6,634	$	6,445

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

12 Commitments and contingencies

Contingencies

Two subsidiaries of the Company are currently undergoing two income tax related audits. While the final outcome of such audits cannot be predicted with certainty, it is the opinion of management that the resolution of these audits will not have a material impact on the Company’s consolidated financial position or results of operations. As part of the acquisition of the Company by Riverstone from Hunting PLC (“Hunting”), Hunting has indemnified the Company for the pre-closing period impact of these audits. Included in income tax receivable and accounts payable and accrued charges as at December 31, 2010 and March 31, 2011 is $53.7 million, whereby Hunting paid the Company and the Company paid the tax assessments relative to these audits. In the three months ended March 31, 2010 income tax payments of $20.5 million were funded by Hunting.

The Company is subject to various regulatory and statutory requirements relating to the protection of the environment. These requirements, in addition to the contractual agreements and management decisions, result in the recognition of estimated asset retirement obligations. Estimates of asset retirement obligation costs can change significantly based on such factors as operating experience and changes in legislation and regulations.

The Company is involved in various legal actions, which have occurred in the ordinary course of business. Management is of the opinion that losses, if any, arising from such legal actions would not have a material impact on the Company’s consolidated financial position or results of operations.

13 Revenue

	Three months ended March 31,
	2011		2010
Products	$	1,016,269	$	882,020
Services	131,748		82,509
	$	1,148,017	$	964,529

14 Depreciation and amortization

	Three months ended March 31,
	2011		2010
Depreciation of property, plant and equipment	$	16,067	$	12,958
Amortization of intangible assets	7,739		5,717
	$	23,806	$	18,675

Depreciation of property, plant and equipment and amortization of intangible assets have been expensed as follows:

	Three months ended March 31,
	2011		2010
Cost of sales	$	23,035	$	17,992
General and administrative	771		683
	$	23,806	$	18,675

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

15 Employee salaries and benefits

	Three months ended March 31,
	2011		2010

Employee salaries and benefits	$	27,417	$	26,160

Employee salaries and benefits have been expensed as follows:

	Three months ended March 31,
	2011		2010
Cost of sales	$	23,505	$	20,884
General and administrative	3,912		5,276
	$	27,417	$	26,160

Included in employee benefits is stock based compensation of $0.6 million and $1.2 million for the three months ended March 31, 2011 and 2010, respectively. The stock based compensation expense is included in general and administrative expenses.

16 Other operating expenses

	Three months ended March 31,
	2011			2010
Loss (gain) on sale of property, plant and equipment	$	(98	)	$	4
Foreign exchange loss	1,274			531
	$	1,176		$	535

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

17 Income tax provision

The income tax provision differs from the amounts, which would be obtained by applying the combined Canadian base federal and provincial income tax rate to income before income taxes. These differences result from the following items:

	Three months ended March 31,
	2011			2010
Income before income taxes	$	48,233		$	14,148
Statutory income tax rate	26.5		%	28.0		%
Computed income tax provision	12,782			3,961
Increase (decrease) in income tax resulting from:
Foreign exchange gain	(574		)	(728		)
Non-taxable portion of capital gain	(2,870		)	—
Non-deductible expenses	40			—
Stock based compensation	217			345
Rate differential on foreign taxes	229			—
Non-taxable dividends	(925		)	—
Other, including revisions in previous tax estimates	(32		)	28
Rate reduction due to partnership deferral	(765		)	(439		)
	$	8,102		$	3,167

Effective income tax rate	16.8		%	22.4		%

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

18 Related party transactions

On December 12, 2008, the Company entered into a management agreement with Riverstone, whereby Riverstone provides management advisory services in connection with the general business operations of the Company. Total management fees and expenses for the three months ended March 31, 2011 and 2010 was $0.3 million and $0.3 million, respectively. These amounts are included in general and administrative expenses on the statement of income.

Other related party transactions include:

	Transaction Value
	Three months ended					Balance outstanding as of
	March 31, 2011		March 31, 2010			March 31, 2011		December 31, 2010

Sale of goods and services
Parent having controlling/significant interest	$	227	$	2		$	124	$	—
Associates	991		1,076			106		156
Purchase of goods and services
Parent having controlling/significant interest	$	12,406	$		50	$	8,586	$	13,043
Associates	3,899		3,441			2,095		1,412

The related party transactions noted above have been measured at agreed upon market based terms.

19 Stock based compensation plan

During the year ended December 31, 2009, the Board of Directors adopted the Equity Incentive Plan (the “Plan”). The Company reserved a total of 59,739 shares for grants under the Plan. The Plan provides for the issuance of stock options, stock appreciation rights, restricted stock and restricted stock units to employees, directors, consultants, and other associates. As of March 31, 2011, the Company has only issued stock options to employees participating in the Plan. The options generally vest in equal tranches annually over a period of five years from the date of grant and have a maximum term of ten years. The Company has granted both traditional time-vesting stock options and performance vesting stock options under the Plan. The performance vesting stock options vest and expire under the same terms and service conditions as the time-vesting stock options, with vesting subject to the Company attaining prescribed performance relative to predetermined key financial measures.

The stock based compensation expense is included in general and administrative expenses and was $0.6 and $1.2 million for the three months ended March 31, 2011 and 2010, respectively.

A summary of activity under the Plan is set forth below.

	Options Outstanding
	Options Available for Grant		Numbers of Shares		Weighted- Average Exercise Price (in dollars)

Balance at December 31, 2010	2,225		57,514		$	1,000
Granted	(360	)	360		1,000
Forfeited	1,449		(1,449	)	1,000
Balance at March 31, 2011	3,314		56,425		$	1,000

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

At March 31, 2011 and December 31, 2010, total outstanding options vested under the Plan were 15,536 and 15,536, respectively, at a weighted-average exercise price of $1,000.

20 Financial instruments

The Company has financial instruments other than financial contracts consisting of cash and cash equivalents, trade and other receivables, trade payables and accrued charges, Credit Facility and long-term debt. Cash and cash equivalents and trade and other receivables are recorded at amortized cost which approximates fair value due to the short term nature of the instrument. Trade payables and accrued charges are designated as other liabilities recorded at amortized cost. The fair value of trade payables and accrued charges approximate their carrying values due to the short term nature of these instruments. Long term debt is designated as other liabilities and held at amortized cost using the effective interest method of amortization. The estimated fair market value of long-term debt at March 31, 2011 and December 31, 2010, based on market information, was U.S. $833.4 million and U.S. $821.8 million, respectively.

Fair Values

The following is a summary of the Company’s risk management contracts outstanding at March 31, 2011:

(i) Commodity financial instruments

The Company has entered into crude oil futures and swap contracts to manage the price risk associated with sales, purchases and inventories of crude oil and petroleum products. One contract corresponds to 1,000 barrels (“bbls”).

(a) WTI Futures

Term	Contract	Volume (Contracts) bbls	Weighted Average U.S.$/unit		Fair Value

November 2011-January 2012	Bought Futures	30	$	98.86
April 2011 – January 2012	Sold Futures	65	102.99
					$	(7	)

(b) OTC WTI Asian Options

Term	Contract	Volume (bbls)	Sold call U.S.$/bbl		Bought put U.S.$/bbl		Fair value

June 1, 2011 – June 30, 2011	Collar	50	$	120.25	$	100.00
June 1, 2011 – June 30, 2011	Collar	25	108.50		98.00
June 1, 2011 – June 30, 2011	Collar	25	108.00		100.00
June 1, 2011 – June 30, 2011	Collar	25	108.60		99.00
June 1, 2011 – June 30, 2011	Collar	25	109.00		99.00
June 1, 2011 – June 30, 2011	Collar	25	110.50		100.00
June 1, 2011 – June 30, 2011	Collar	25	112.00		100.00
							$	(384	)

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

(c) Natural Gas Liquids (NGL)

The Company has entered into NGL swap contracts to manage the risk associated with sales, purchases and inventories of NGLs.

ClearPort-WTI to Mt. Belvieu Propane Swaps

Term	Contract	Volume (bbls)	U.S.$/bbl		Fair Value

April 2011 – December 2011	Sold WTI	5	$	83.77
	Bought Propane	10	40.95
April 2011 – September 2011	Bought WTI	5	77.31
	Sold Propane	10	39.59
October 2011 – December 2011	Bought WTI	5	95.17
	Sold Propane	10	52.34
January 2012 – December 2012	Bought WTI	10	101.85
	Sold Propane	20	56.02
January 2012 – December 2012	Sold WTI	3	104.70
	Bought Propane	5	54.44
					$	573

ClearPort- WTI to Mt. Belvieu Natural Gasoline Swap

Term	Contract	Volume (bbls)	U.S.$/bbl		Fair Value

October 2011 – December 2011	Bought WTI	30	$	97.66
	Sold Natural Gasoline	30	94.08
October 2011 – December 2011	Sold WTI	30	106.25
	Bought Natural Gasoline	30	101.64
					$	88

ClearPort-WTI to Mt. Belvieu Butane Swaps

Term	Contract	Volume (bbls)	U.S.$/bbl		Fair Value

April 2011 – December 2011	Sold WTI	38	$	84.49
	Bought Butane	55	59.97
April 2011 – December 2011	Bought WTI	38	82.42
	Sold Butane	55	59.35
April 2011 – March 2012	Sold WTI	15	96.62
	Bought Butane	20	69.86
April 2011 – March 2012	Bought WTI	15	95.77
	Sold Butane	20	71.30
					$	1,015

ClearPort-WTI to Mt. Belvieu Butane Swaps to Mt. Belvieu ISO Butane Swaps

Term	Contract	Volume (bbls)	U.S.$/bbl		Fair Value

April 2011 – March 2012	Sold WTI	7	$	104.48
	Bought Butane	7	75.39
	Bought ISO Butane	3	78.33
					$	174

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

ClearPort — Mt. Belvieu Propane to Mt. Belvieu Natural Gasoline Swap

Term	Contract	Volume (bbls)	U.S.$/bbl		Fair Value

October 2011 – December 2011	Sold Propane	20	$	55.65
	Bought Natural Gasoline	11	95.76

October 2011 – December 2011	Bought Propane	20	58.33
	Sold Natural Gasoline	11	102.43
					$	57

Mt. Belvieu Natural Gasoline Swaps

Term	Contract	Volume (bbls)	U.S.$/bbl		Fair Value

October 2011 – December 2011	Bought Fixed Price	10/mth	$	93.28
October 2011 – December 2011	Sold Fixed Price	10/mth	93.56
					$	8

(d) Electricity Price Swap

The Company is a party to a financial swap contract to fix the level of anticipated electricity costs that are price sensitive to the Alberta Electric System Operator (AESO) Pool Price. If the actual AESO Pool Price is greater than $80.49 /megawatt hour the Company receives the difference between that price and $80.49. If the actual AESO Pool Price is less than $80.49, the Company pays the difference between that price and $80.49. The contract is for 3 megawatts, 24 hours per day, seven days per week, with a remaining term to December 31, 2012.

AESO electricity swap

Term	Contract	Volume Megawatt hour /day	$/ Megawatt hour		Fair Value

April 1, 2011 – December 31, 2012	Bought Fixed Price	72	$	80.49	$	(573	)

(ii) Currency financial instruments

The Company has entered into forward contracts to sell U.S. dollars in exchange for Canadian dollars to fix the exchange rate on its estimated future net cash flows denominated in U.S. dollars. The Company has also entered into forward contracts to help mitigate the exposure on its U.S. dollar interest payments on the long-term debt.

USD Dollar Forwards

Term	Contract	Volume U.S.$	Weighted average exchange rate (CAD$/U.S.$)		Fair value

April 25, 2011	Forward sell	80,000	$	0.9773
May 31, 2011	Forward buy	28,000	0.9796
					$	418

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

The Company’s financial instruments consist of financially settled commodity futures, options swap contracts, foreign currency forward contracts and foreign currency options. The value of the Company’s risk management contracts are determined using inputs that are either readily available in public markets or are quoted by counterparties to these contracts. In situations where the Company obtains inputs via quotes from its counterparties, these quotes are verified for reasonableness via similar quotes from another source for each date for which financial statements are presented. The Company has consistently applied these valuation techniques in all periods presented and the Company believes it has obtained the most accurate information available for the types of financial instrument contracts held. The Company has categorized the inputs for these contracts as Level 1, defined as observable inputs such as quoted prices in active markets; Level 2 defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; or Level 3 defined as unobservable inputs in which little or no market data exists therefore requiring an entity to develop its own assumptions.

The fair value of financial instrument contracts at March 31, 2011 was:

	Total		Level 1		Level 2		Level 3
Assets from commodity financial instrument contracts
Commodity futures	$	4	$	4	$	—	$	—
Commodity options	122		—		122		—
Commodity swaps	3,009		—		3,009		—
Electricity swaps	10		—		10		—
Foreign currency forward contracts and options	709		—		709		—
Total assets	$	3,854	$	4	$	3,850	$	—

Liabilities from commodity financial instrument contracts
Commodity futures	$	11	$	11	$	—	$	—
Commodity options	506		—		506		—
Commodity swaps	1,094		—		1,094		—
Electricity swaps	583		—		583		—
Foreign currency forward contracts and options	291		—		291		—
Total liabilities	$	2,485	$	11	$	2,474	$	—

The fair value of financial instrument contracts at December 31, 2010 was:

	Total		Level 1		Level 2		Level 3
Assets from commodity financial instrument contracts
Commodity swaps	$	1,029	$	—	$	1,029	$	—
Foreign currency forward contracts and options	783		—		783		—
Total assets	$	1,812	$	—	$	1,812	$	—

Liabilities from commodity financial instrument contracts
Commodity futures	$	1,599	$	1,599	$	—	$	—
Commodity swaps	122		—		122		—
Electricity swaps	1,463		—		1,463		—
Foreign currency forward contracts and options	68		—		68		—
Total liabilities	$	3,252	$	1,599	$	1,653	$	—

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

The impact of financial instruments has been expensed in the statement of income as follows:

	Three months ended March 31,
	2011			2010

Cost of sales	$	(1,664	)	$	(2,277	)
Interest expense	224			—
	$	(1,440	)	$	(2,277	)

Financial Risk Management

The Company’s activities expose it to certain financial risks, including foreign exchange risk, interest rate risk, commodity price risk, credit risk and liquidity risk. The Company’s risk management strategy seeks to minimize potential adverse effects on its financial performance. As part of its strategy, both primary and derivative financial instruments are used to hedge its risk exposures.

There are clearly defined objectives and principles for managing financial risk, with policies, parameters and procedures covering the specific areas of funding, banking relationships, interest rate exposures and cash management. The Company’s treasury function is responsible for implementing the policies and providing a centralised service to the Company for identifying evaluating and monitoring financial risks.

a) Foreign Exchange Risk

Foreign exchange risks arise from future transactions and cash flows and from recognized monetary assets and liabilities that are not denominated in the functional currency of the Company’s operations.

The exposure to exchange rate movements in significant future transactions and cash flows is managed using forward foreign exchange contracts, currency options and currency swaps. These financial instruments have not been designated in a hedge relationship. No speculative positions are entered into by the Company.

Foreign currency exchange rate sensitivity

At March 31, 2011, if the Canadian dollar strengthened or weakened by 5% relative to the U.S. dollar and all other variables, in particular interest rates remain constant, the impact on net income would be as follows:

	Three months ended March 31,
	2011						2010
	Net Income			Equity			Net Income			Equity
USD Forwards
Favorable 5% Change	$	1,872		$	1,872		$	1,139		$	1,139
Unfavorable 5% Change	(1,872		)	(1,872		)	(1,139		)	(1,139		)

Long-term debt
Favorable 5% Change	$	31,759		$	31,759		$	33,190		$	33,190
Unfavorable 5% Change	(31,759		)	(31,759		)	(33,190		)	(33,190		)

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

The movement is a result of a change in the fair value of U.S. dollar forward contracts, which have not been designated as a hedge, and also the change in the carrying value of the Company’s U.S. dollar denominated long-term debt.

The impact of translating the net assets of our U.S operations into Canadian dollars is excluded from this sensitivity analysis.

b) Interest Rate Risk

Interest rate risk is the risk that the value of a financial instrument will be affected by changes in market interest rates. Existing long-term debt accrues interest at fixed interest rates and, consequently, has no exposure to changes in market interest rates. Under the Credit Facility, the Company is subject to interest rate risk as borrowings bear interest at a rate equal to at the Company’s option either LIBOR the prime rate the Bankers Acceptance rate or the Above Bank Rate plus an applicable margin based on a pricing grid. A change of 1% in the interest rate would have had an immaterial impact on net income and equity in both the current and prior period. The Company’s interest rate risk exposure does not exist within any of the operating segments, but exists at the corporate level where the variable rate debt obligations are issued.

c) Commodity price risk

The Company is exposed to changes in the price of oil, oil related products, natural gas and electricity commodities, which are monitored regularly. Oil and gas price futures, options and swaps are used to manage the exposure to oil and gas price movements. These financial instruments are not designated as a hedge. An electricity price swap is used to manage the exposure to electricity prices in Canada and is marked to market each period. Based on the Company’s risk management policies, all of the financial instruments are employed in connection with an underlying asset liability and/or forecasted transaction and are not entered into with the objective of speculating on commodity prices.

The following table summarizes the change in fair value of the Company’s risk management positions to fluctuations in commodity prices leaving all other variables constant. The Company believes a 15% volatility in crude oil related prices and a 10% volatility in electricity prices are reasonable assumptions. This analysis assumes that all other variables in particular foreign currency rates remain constant.

	Three months ended March 31,
	2011						2010
	Net Income			Equity			Net Income			Equity
Crude oil related prices
Favorable 15% Change	$	2,139		$	2,139		$	4,820		$	4,820
Unfavorable 15% Change	(2,697		)	(2,697		)	(4,820		)	(4,820		)

Electricity prices
Favorable 10% Change	$	226		$	226		$	265		$	265
Unfavorable 10% Change	(226		)	(226		)	(265		)	(265		)

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

d) Credit risk

The Company’s credit risk arises from its outstanding trade receivables. A significant portion of the Company’s trade receivables are due from entities in the oil and gas industry. Concentration of credit risk is mitigated by having a broad customer base and by dealing with credit-worthy counterparties in accordance with established credit approval practices. The Company actively monitors the financial strength of its customers and in select cases has tightened credit terms to minimize the risk of default on accounts receivable. In addition, the Company maintains trade receivable insurance for eligible customers with an approved credit limit from $0.2 million to $10.0 million.

The movement in the allowance for doubtful accounts in respect of trade and other receivables was as follows:

	Three months ended March 31,
	2011			2010
Opening balance	$	2,157		$	386
Accounts receivable write off	—			(12		)
Additional allowances	1,609			2
Effect of movement in exchange rates	(12		)	—
Ending balance	$	3,754		$	376

At March 31, 2011 and December 31, 2010 approximately 6% and 7% respectively of net trade receivables are past due but not considered to be impaired. The maximum exposure to credit risk related to trade receivables is their carrying value as disclosed in the financial statements.

The Company establishes guidelines for customer credit limits and terms. The Company review includes external ratings when available and financial statements. Customers that are considered as “high risk” are closely monitored and future sales may be made on a prepayment or collateralized basis. However, the Company does not generally require collateral in respect of trade and other receivables. The Company provides adequate provisions for expected losses from the credit risks associated with trade receivables. The provision is based on an individual account-by-account analysis and prior credit history.

The Company is exposed to credit risk associated with possible non-performance by financial instrument counterparties. The Company does not generally require collateral from its counterparties but believes the risk of non-performance is minimal. The counterparties are major financial institutions or commodity brokers with investment grade credit ratings as determined by recognized credit rating agencies.

The Company’s cash equivalents are placed in high-quality commercial paper money market funds and time deposits with major international banks and financial institutions.

e) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. This risk relates to the Company’s ability to generate or obtain sufficient cash or cash equivalents to satisfy these financial obligations as they become due. The Company’s process for managing liquidity risk include preparing and monitoring capital and operating budgets, coordinating and authorizing project expenditures and authorization of contractual agreements. The Company seeks additional financing based on the results of these processes. The budgets are updated with forecasts when required, and as conditions change. Sufficient funds and the Credit

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

Facility are available to satisfy both the Company’s long and short-term requirements. The Credit Facility totals U.S.$200.0 million and at March 31, 2011 there was no amount drawn against the facility.

The terms of the Credit Facility require the Company to comply with financial covenants when the available amount under the facility is less than 15% of the facility, including maintaining a fixed charge coverage ratio. If the Company fails to comply with this covenant the lenders may declare an event of default under the facility. At March 31, 2011 this covenant is not applicable.

Set out below is maturity analyses of certain of the Company’s financial liabilities as recorded on the balance sheet at March 31, 2011. The maturity dates are the contractual maturities of the financial liabilities and the amounts are the contractual undiscounted cash flows.

Financial Liabilities	On demand or within one year		Between one and five years		After five years		Total

Non-financial instrument liabilities
Trade payables and accrued charges	$	392,744	$	—	$	—	$	392,744
Long-term debt	—		544,208		194,360		738,568
Accrued interest on long-term debt	25,660		—		—		25,660
	$	418,404	$	544,208	$	194,360	$	1,156,972
Financial instrument liabilities
Commodity futures	$	11	$	—	$	—	$	11
Commodity options	506		—		—		506
Commodity swaps	1,061		33		—		1,094
Electricity swaps	286		297		—		583
Foreign currency forward contracts	291		—		—		291
Total financial liabilities	$	2,155	$	330	$	—	$	2,485

Capital management

The Company’s objectives when managing its capital structure are to maintain financial flexibility so as to preserve the Company’s ability to meet its financial obligations and to finance internally generated growth as well as potential acquisitions.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. The Company considers its capital structure to include shareholders’ equity, long-term debt, the Credit Facility and working capital. To maintain or adjust the capital structure, the Company may raise debt and/or adjust its capital spending to manage its current and projected debt levels.

Financing decisions are made by management and the Board of Directors based on forecasts of the expected timing and level of capital and operating expenditure required to meet the Company’s commitments and development plans. Factors considered when determining whether to issue new debt or to seek equity financing include the amount of financing required, the availability of financial resources, the terms on which financing is available and consideration of the balance between shareholder value creation and prudent financial risk management.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the consolidated statement of financial position), less cash and cash equivalents. Total capital is calculated as net debt plus share capital as shown in the consolidated balance sheet.

	March 31, 2011			December 31, 2010

Total financial liability borrowings	$	702,651		$	761,654
Less: cash and cash equivalents	(51,989		)	(7,225		)
Net debt	650,662			754,429
Total share capital	668,827			664,724
Total capital	$	1,319,489		$	1,419,153

If the Company is in a net debt position, the Company will assess whether the projected cash flow and availability under the Credit Facility is sufficient to service this debt and support ongoing operations. Consideration will be given to reducing the total debt or raising funds through an alternative route such as issuing common shares.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

21 Segmental information

The Company has defined its operations into the following operating segments: (i) Terminals and Pipelines, (ii) Truck Transportation, (iii) Propane and NGL Marketing and Distribution, (iv) Processing and Wellsite Fluids, and (v) Marketing.

Terminals and pipelines includes the tariff-based pipeline services and fee-based storage and terminalling services for crude oil, condensate and refined products. The Company owns and operates pipelines and custom blending terminals, which are strategically located throughout Alberta and Saskatchewan, injection stations, which are located in the United States and major storage terminals located at Edmonton and Hardisty, which are the principal hubs for aggregating and exporting oil and refined products out of the Western Canadian Sedimentary Basin.

Truck transportation includes the hauling services for crude, condensate, propane, butane, asphalt, methanol, sulfur, petroleum coke, gypsum and drilling fluids to customers in Western Canada and the United States.

Propane and NGL marketing and distribution includes a retail propane distribution operation and a wholesale business that includes a wholesale propane distribution and an NGL marketing business. The retail operations sell propane to oil and gas, industrial and residential customers, while the wholesale operations sell to larger customers who are not usually end users of the product.

Processing and wellsite fluids includes the refining and marketing of a variety of products, including several grades of road asphalt, roofing flux, wellsite fluids and tops.

Marketing includes the purchasing, selling, storing, and blending of crude oil and condensate, taking advantage of specific location, quality, or time-based arbitrage opportunities.

These operating segments of the Company have been derived because they are the segments (a) that engage in business activities from which revenues are earned and expenses are incurred; (b) whose operating results are regularly reviewed by the Company’s chief operating decision makers to make decisions about resources to be allocated to each segment and assess its performance; and (c) for which discrete financial information is available. No operating segments were aggregated to arrive at the reportable segments.

Inter-segmental transactions are eliminated upon consolidation. No margins are recognized on inter-segmental transactions.

Accounting policies used for segment reporting are consistent with the accounting policies used for the preparation of the Company’s consolidated financial statements.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

Three months ended March 31, 2011	Terminals & Pipelines			Truck Transportation			Propane & NGL Marketing & Distribution			Processing & Wellsite Fluids			Marketing			Corporate & other reconciling balances			Total
Statement of income
Revenue - external and inter-segmental	$	222,825		$	107,618		$	268,972		$	119,359		$	815,780		$	—		$	1,534,554
Revenue - inter-segmental	(187,658		)	(14,161		)	(26,725		)	(36,249		)	(121,744		)	—			(386,537		)
Revenue - external	35,167			93,457			242,247			83,110			694,036			—			1,148,017
Segment profit	16,736			16,236			17,548			11,128			4,826			—			66,474

Depreciation of property, plant and equipment	6,037			5,975			2,000			1,608			41			406			16,067
Amortization of intangible assets	531			3,399			1,563			1,711			170			365			7,739
General and administrative	—			—			—			—			—			5,982			5,982
Stock based compensation	—			—			—			—			—			621			621
Gain on sale of Edmonton North	—			—			—			—			—			(20,370		)	(20,370		)
Corporate foreign exchange loss	—			—			—			—			—			883			883
Interest expense	—			—			—			—			—			24,705			24,705
Interest income	—			—			—			—			—			(58		)	(58		)
Other financing expense	—			—			—			—			—			(17,328		)	(17,328		)
Income tax expense	—			—			—			—			—			8,102			8,102
Net income	$	10,168		$	6,862		$	13,985		$	7,809		$	4,615		$	(3,308	)	$	40,131

Total assets	$	552,200		$	317,829		$	307,209		$	336,389		$	345,377		$	156,373		$	2,015,377
Total liabilities	21,028			35,982			60,915			29,064			280,443			1,005,884			1,433,316

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

Three months ended March 31, 2010	Terminals & Pipelines			Truck Transportation			Propane & NGL Marketing & Distribution			Processing & Wellsite Fluids			Marketing			Corporate & other reconciling balances			Total
Statement of income
Revenue - external and inter-segmental	$	282,167		$	66,012		$	174,116		$	120,521		$	870,724		$	—		$	1,513,540
Revenue - inter-segmental	(270,730		)	(15,965		)	(32,031		)	(27,875		)	(202,410		)	—			(549,011		)
Revenue - external	11,437			50,047			142,085			92,646			668,314			—			964,529
Segmental profit	8,382			9,622			13,175			9,143			2,634			—			42,956

Depreciation of property, plant and equipment	5,053			3,995			1,688			1,524			524			174			12,958
Amortization of intangible assets	477			1,783			965			1,814			169			509			5,717
General and administrative	—			—			—			—			—			6,237			6,237
Stock based compensation	—			—			—			—			—			1,150			1,150
Foreign exchange gain	—			—			—			—			—			(274		)	(274		)
Interest expense	—			—			—			—			—			24,036			24,036
Interest income	—			—			—			—			—			(216		)	(216		)
Other financing income	—			—			—			—			—			(20,800		)	(20,800		)
Income tax expense	—			—			—			—			—			3,167			3,167
Net income	$	2,852		$	3,844		$	10,522		$	5,805		$	1,941		$	(13,983	)	$	10,981

Total assets	$	469,741		$	210,847		$	263,755		$	326,435		$	307,874		$	266,519		$	1,845,171
Total liabilities	16,112			25,354			46,408			33,408			167,243			999,937			1,288,462

Geographic Data

Based on the location of the end user, approximately 21% and 13% of revenue was to customers in the United States for the three months ended March 31, 2011 and 2010, respectively.

The Company’s long lived assets are primarily concentrated in Canada with 11% in the United States at both March 31, 2011 and December 31, 2010.

22 Transition to IFRS

As stated in note 2, effective January 1, 2011, the Company began reporting under IFRS, and the accounting policies disclosed in note 3 have been applied in preparing the financial statements for the three month ended March 31, 2011 and 2010, for the year ended December 31, 2010, and in the preparation of the Company’s opening balance sheet at January 1, 2010, the transition date.

In preparing the opening IFRS balance sheet, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Canadian GAAP. An explanation of how the transition from Canadian GAAP to IFRS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables.

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

(i) Reconciliation of assets, liabilities and equity as previously reported under Canadian GAAP to IFRS

	As at December 31, 2010
	Canadian GAAP			Adjustments				IFRS
Assets
Current assets
Cash and cash equivalents	$	7,225		$	—			$	7,225
Trade and other receivables	354,682			—				354,682
Income taxes receivable	57,130			—				57,130
Inventories	197,483			—				197,483
Prepaid expenses and other assets	8,749			(906		)	(h)	7,843
Net investment in finance leases	236			—				236
Assets held for sale	32,985			611			(c)	33,596
Total current assets	658,490			(295		)		658,195
Non-current assets
Deferred income tax assets	13,422			—				13,422
Long-term prepaid expenses and other assets	24,276			(2,286		)	(h)	21,990
Net investment in finance leases	20,265			—				20,265
Property, plant and equipment	652,885			(36,745		)	(a)	629,755
				14,398			(c)
				1,488			(d)
				(4,852		)	(g)
				3,192			(h)
				(611		)	(c)
Intangible assets	154,610			(7,123		)	(b)	152,339
				4,852			(g)
Goodwill	498,817			(2,401		)	(f)	496,416
Total non-current assets	1,364,275			(30,088		)		1,334,187
Total assets	$	2,022,765		$	(30,383	)		$	1,992,382
Liabilities
Current liabilities
Credit Facility	$	43,500		$	—			$	43,500
Trade payables and accrued charges	393,686			—				393,686
Deferred revenue	54,701			—				54,701
Income taxes payable	1,217			—				1,217
Deferred income tax liabilities	177			(177		)	(i)	—
Liabilities related to assets held for sale	2,960			802			(c)	3,762
Total current liabilities	496,241			625				496,866
Non-current liabilities
Long-term debt	718,154			—				718,154
Provisions	22,045			21,206			(c)	43,251
Other long-term liabilities	3,224			3,221			(e)	6,445
Deferred income tax liabilities	196,440			(13,582		)	(i)	182,858
Total non-current liabilities	939,863			10,845				950,708
Total liabilities	1,436,104			11,470				1,447,574
Equity
Share capital	664,724			—				664,724
Contributed surplus	13,586			—				13,586
Accumulated other comprehensive loss	(6,767		)	(575		)	(e)	(7,342		)
Deficit	(84,882		)	(41,278		)	(k)	(126,160		)
Total equity	586,661			(41,853		)		544,808
Total liabilities and shareholder’s equity	$	2,022,765		$	(30,383	)		$	1,992,382

Gibson Energy Holding ULC

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

(tabular amounts in thousands of Canadian dollars, except where noted)

	As at March 31, 2010
	Canadian GAAP			Adjustments				IFRS
Assets
Current assets
Cash and cash equivalents	$	185,542		$	—			$	185,542
Trade and other receivables	322,287			—				322,287
Income taxes receivable	33,780			—				33,780
Inventories	123,121							123,121
Prepaid expenses and other assets	6,292			(884		)	(h)	5,408
Total current assets	671,022			(884		)		670,138

Non-current assets
Deferred income tax assets	5,225			—				5,225
Long-term prepaid expenses and other assets	30,507			(2,123		)	(h)	28,384
Property, plant and equipment	602,817			(39,233		)	(a)	575,128
				12,726			(c)
				538			(d)
				(4,727		)	(g)
				3,007			(h)
Intangible assets	129,726			(9,013		)	(b)	125,440
				4,727			(g)
Goodwill	440,898			(42		)	(f)	440,856
Total non-current assets	1,209,173			(34,140		)		1,175,033
Total assets	$	1,880,195		$	(35,024	)		$	1,845,171
Liabilities
Current liabilities
Trade payables and accrued charges	$	318,529		$	—			$	318,529
Deferred income tax liabilities	839			(839		)	(i)	—
Total current liabilities	319,368			(839		)		318,529

Non-current liabilities
Long-term debt	728,981			—				728,981
Provisions	21,432			19,505			(c)	40,937
Other long-term liabilities	3,181			2,775			(e)	5,956
Deferred income tax liabilities	207,546			(13,487		)	(i)	194,059
Total non-current liabilities	961,140			8,793				969,933
Total liabilities	1,280,508			7,954				1,288,462
Equity
Share capital	654,061			—				654,061
Contributed surplus	10,107			—				10,107
Deficit	(64,481		)	(42,978		)	(k)	(107,459		)
Total equity	599,687

Gibson Energy ULC 6-K