**U.S. SECURITIES AND EXCHANGECOMMISSIONWashington, D.C.  20549**

**FORM 40-F**

**(CheckOne)**

**o**** Registration statementpursuant to Section 12 of the Securities Exchange Act of 1934**

**or**

**x**** Annual report pursuant tosection 13(a) or 15(d) of the Securities Exchange Act of 1934**

**For the fiscal year ended December 31, 2006**

**Commission file number 1-32895**

**PENN WESTENERGY TRUST**

(Exact name ofregistrant as specified in its charter)
| **Alberta, Canada**                                                 | **1311**                                                                    | **Not  applicable**                                       |
|---------------------------------------------------------------------|-----------------------------------------------------------------------------|-----------------------------------------------------------|
| (Province or  other jurisdiction of  incorporation or organization) | (Primary  Standard Industrial  Classification Code Number (if  applicable)) | (I.R.S. Employer  Identification Number (if  Applicable)) |

 

**Suite 2200, 425 1st Street S.W.Calgary, Alberta, Canada T2P 3L8(403) 777-2666**(Address and Telephone Number of Registrant’s PrincipalExecutive Offices)

**DLServices Inc., 1420 Fifth Avenue, Suite 3400, Seattle, WA  98101(206) 903-5448**(Name, Address (Including Zip Code) and Telephone Number (Including Area Code) of Agent For Service in the United States)

Securities registered orto be registered pursuant to Section 12(b) of the Act.

| Title of each class | ** ** | **Name of each exchange on which registered** |
|---------------------|------------|-----------------------------------------------|
| Trust Units         |       | New York Stock  Exchange                      |

 

Securities registered orto be registered pursuant to Section 12(g) of the Act:  **None**

Securities for whichthere is a reporting obligation pursuant to Section 15(d) of the Act:  **None**

For annual reports,indicate by check mark the information filed with this Form:
| x Annual  Information Form | x Audited  Annual Financial Statements |
|---------------------------------|---------------------------------------------|

 

Indicate the number of outstanding shares of each of the issuer’sclasses of capital or common stock as of the close of the period covered by theannual report:  237,126,219

Indicate by check mark whether the registrant by filing the informationcontained in this Form is also thereby furnishing the information to theCommission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934(the “Exchange Act”).  If “Yes” ismarked, indicate the file number assigned to the registrant in connection withsuch rule.

Yes o                No x

Indicate by check mark whether the registrant: (1) has filed allreports required to be filed by Section 13 or 15(d) of the Exchange Act duringthe preceding 12 months (or for such shorter period that the registrant wasrequired to file such reports); and (2) has been subject to such filingrequirements for the past 90 days.

Yes x                No o

 

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**FORM 40-F**

**Principal Documents**

The following documents,filed as Exhibits 99.1, 99.2, 99.3 and 99.4 to this Annual Report on Form 40-F,are hereby incorporated by reference into this Annual Report on Form 40-F:

(a)                                  AnnualInformation Form for the fiscal year ended December 31, 2006;

(b)                                 Management’sDiscussion and Analysis of Financial Condition and Results of Operations forthe fiscal year ended December 31, 2006;

(c)                                  ConsolidatedFinancial Statements for the fiscal year ended December 31, 2006; and

(d)                                 SupplementalNote to the Consolidated Financial Statements relating to the reconciliation ofCanadian and United States Generally Accepted Accounting Principles.

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**ADDITIONALDISCLOSURE**

**Certifications and DisclosureRegarding Controls and Procedures.**

(a)                                  Certifications.  See Exhibits 99.5 and 99.6 to this AnnualReport on Form 40-F.

(b)                                 DisclosureControls and Procedures.  As of theend of Penn West Energy Trust’s (“Penn West”) fiscal year ended December 31,2006, an evaluation of the effectiveness of Penn West’s “disclosure controlsand procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) ofthe Securities Exchange Act of 1934, as amended (the “Exchange Act”)) wascarried out by the management of Penn West Petroleum Ltd., the administrator ofPenn West, with the participation of the President and Chief Executive Officer(“CEO”) and the Senior Vice President and Chief Financial Officer (“CFO”) ofPenn West Petroleum Ltd., who also perform such functions for Penn West.  Based upon that evaluation, the CEO and CFOhave concluded that as of the end of that fiscal year, Penn West’s disclosurecontrols and procedures are effective to ensure that information required to bedisclosed by Penn West in reports that it files or submits under the ExchangeAct is (i) recorded, processed, summarized and reported within the time periodsspecified in Securities and Exchange Commission rules and forms and (ii)accumulated and communicated to Penn West’s management, including its principalexecutive officer and principal financial officer, to allow timely decisionsregarding required disclosure.

It should be noted that while the CEO and CFO believe that Penn West’sdisclosure controls and procedures provide a reasonable level of assurance thatthey are effective, they do not expect that Penn West’s disclosure controls andprocedures or internal control over financial reporting will prevent all errorsand fraud.  A control system, no matterhow well conceived or operated, can provide only reasonable, not absolute, assurancethat the objectives of the control system are met.

(c)                                  Changesin Internal Control Over Financial Reporting.  During the fiscal year ended December 31,2006, there were no changes in Penn West’s internal control over financialreporting that have materially affected, or are reasonably likely to materiallyaffect, Penn West’s internal control over financial reporting.

**Notices Pursuant to RegulationBTR.**

None.

**Audit Committee Financial Expert.**

Penn West’s board ofdirectors has determined that James C. Smith, a member of Penn West’s auditcommittee, qualifies as an “audit committee financial expert” (as such term

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is defined in Form40-F).  Mr. Smith is “independent” asthat term in defined in the rules of the New York Stock Exchange.

**Code of Business Conduct**.

Penn West hasadopted a Code of Ethics for Officers and Senior Financial Management.  Penn West has also adopted a Code of BusinessConduct and Ethics that applies to all employees, officers and directors ofPenn West.  These Codes constitute a “codeof ethics” as defined in Form 40-F.

The Code of Ethicsfor Officers and Senior Financial Management and the Code of Business Conductand Ethics are each available for viewing on Penn West’s website atwww.pennwest.com, and are available in print to any unitholder who requests acopy of them.  Requests for copies ofeither of the Codes should be made by contacting: investor relations by phoneat (888) 770-2633 or by e-mail to investor_relations@pennwest.com.

Since the adoption of theCode of Ethics for Officers and Senior Financial Management and the Code ofBusiness Conduct and Ethics, respectively, there have not been any amendmentsto, or waivers, including implicit waivers, from, any provision of the Codes.

**Principal Accountant Fees and Services.**

The following table setsforth information about the fees billed to Penn West for professional servicesprovided by KPMG LLP during fiscal 2006 and 2005:
| **(CDN$)**          | ** ** | **2006** | ** ** | **2005** | ** ** |
|---------------------|------------|----------|------------|----------|------------|
| Audit Fees          |       | $        | 485,000    |     | $          | 215,000 |   |
| Audit-Related  Fees |       | 230,000  |       | 187,500  |       |
| Tax Fees            |       | 18,341   |       | 42,738   |       |
| All Other Fees      |       | —   |       | —   |       |
| Total               |       | $        | 733,341    |     | $          | 445,238 |   |

 

Fees.  Audit fees consist of fees for the audit ofPenn West’s annual financial statements or services that are normally providedin connection with statutory and regulatory filings or engagements.

Audit-Related Fees.  Audit-related fees consist of fees forassurance and related services that are reasonably related to the performanceof the audit or review of Penn West’s financial statements and are not reportedas Audit Fees.  During fiscal 2006 and2005, the services provided in this category included due diligence reviews inconnection with acquisitions and corporate reorganizations, Sarbanes-Oxleyrelated services and French translation services.

Tax Fees.  Tax fees consist of fees for tax complianceservices, tax advice and tax planning. During fiscal 2006 and 2005, the services provided in this categoryincluded

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assistance and advice inrelation to the communication of the taxability of distributions to unitholdersand the preparation of corporate income tax returns.

All Other Fees.  None.

**Pre-Approval Policies and Procedures.**

(a)                                  Theterms of the engagement of Penn West’s external auditors to provide auditservices, including the budgeted fees for such audit services and the representationsand disclaimers relating thereto, must be pre-approved by the entire auditcommittee.

With respect to any engagements of Penn West’sexternal auditors for non-audit services, Penn West must obtain the approval ofthe audit committee or the Chairman of the audit committee prior to retainingthe external auditors to complete such engagement.  If such pre-approval is provided by theChairman of the audit committee, the Chairman shall report to the auditcommittee on any non-audit service engagement pre-approved by him at the auditcommittee’s first scheduled meeting following such pre-approval.

If, after using its reasonable best efforts, Penn Westis unable to contact the Chairman of the audit committee on a timely basis toobtain the pre-approval contemplated by the preceding paragraph, Penn West mayobtain the required pre-approval from any other member of the audit committee,provided that any such audit committee member shall report to the auditcommittee on any non-audit service engagement pre-approved by him at the auditcommittee’s first scheduled meeting following such pre-approval.

(b)                                 Ofthe fees reported in this Annual Report on Form 40-F under the heading “PrincipalAccountant Fees and Services”, none of the fees billed by KPMG LLP were approvedby Penn West’s audit committee pursuant to the *de minimus*exception provided by Section (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

**Off-Balance Sheet Arrangements.**

Penn West does nothave any off-balance sheet financing arrangements that have, or are reasonablylikely to have, a material effect on its financial condition, changes infinancial condition, revenues or expenses, results of operations, liquidity,capital expenditures or capital resources.

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**Tabular Disclosure of Contractual Obligations.**

(CDN$millions)
| ** **                        | ** ** | ** **  | ** ** | **Payment due by period** | ** ** |
|-----------------------------------|------------|-------------|------------|------------------------------------------|------------|
| **Contractual Obligations**  | ** ** | **Total**   | ** ** | **Less than  1 Year**          | ** ** | **1 to 3  Years** | ** ** | **3 to 5  Years** | ** ** | **More  than 5  Years** | ** ** |
| Transportation                    |       | 59.5        |       | 22.9                                     |       | 19.3 |   | 7.3 |   | 10.0 |   |
| Power  Infrastructure             |       | 27.0        |       | 4.6                                      |       | 7.4 |   | 7.4 |   | 7.6 |   |
| Drilling rigs                     |       | 18.2        |       | 6.9                                      |       | 10.1 |   | 1.2 |   | — |   |
| Purchase  obligations (1)         |       | 120.7       |       | 13.2                                     |       | 26.6 |   | 26.6 |   | 54.3 |   |
| Office lease                      |       | 194.3       |       | 12.0                                     |       | 35.4 |   | 29.4 |   | 117.5 |   |
| Long term debt  (2)(3)            |       | 1,285.0     |       | —                                   |       | — |   | — |   | 1,285.0 |   |
| Asset retirement  obligations (4) |       | 1,269.0     |       | 33.9                                     |       | 67.8 |   | 67.8 |   | 1,099.5 |   |
| **Total**                         | ** ** | **2,967.1** | ** ** | **93.5**                                 | ** ** | **166.6** | ** ** | **139.7** | ** ** | **2,573.9** | ** ** |

 

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(1)          Theseamounts represent estimated commitments of $95.5 million for CO2 purchases and$25.2 million for processing fees related to interests in the Weyburn Unit.

(2)          Approvalto extend the revolving period must be obtained from the banking syndicate inthree years. Penn West and its predecessor have successfully extended itscredit facility on each renewal date since 1992.

(3)          Interestpayments have not been included since future debt levels and rates are notknown at this time.

(4)          These amounts representthe undiscounted future reclamation and abandonment costs that are expected tobe incurred over the life of the properties.

**Identification of the Audit Committee.**

Penn West has aseparately-designated standing audit committee established in accordance withSection 3(a)(58)(A) of the Exchange Act. The members of the audit committee are: Thomas E. Phillips, James C. Smith, Murray R. Nunns, George H. Brookmanand James E. Allard.

**Disclosure Pursuant to the Requirements of the NewYork Stock Exchange.**

**Presiding Director at Meetings of Non-ManagementDirectors**

Penn West schedules regular executive sessions inwhich Penn West’s “non-management directors” (as that term is defined in therules of the New York Stock Exchange) meet without managementparticipation.  John A. Brussa serves asthe presiding director (the “Presiding Director”) at such sessions.  Penn West’s Board of Directors is responsible fordetermining whether or not each director is independent.  In making this determination, the Board hasadopted the definition of “independence” as set out in Section 1.4 ofMultilateral Instrument 52-110 Audit Committees (“MI 52-110”).  In applying this definition, the Boardconsiders all relationships of the directors with Penn West, includingbusiness, family and other relationships. Penn West’s Board of Directors also determines whether each member ofPenn West’s Audit Committee is independent pursuant to Sections 1.4 and 1.5 ofMI 52-110 and Rule 10A-3 of the *Securities Exchange Act*of 1934.  Penn West’s Board of Directorshas not adopted the director independence standards contained in Section303A.02 of the NYSE’s Listed Company Manual.

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**Communication with Non-Management Directors**

Unitholders may sendcommunications to Penn West’s non-management directors by writing to George H.Brookman care of Investor Relations – Penn West Energy Trust, 2200, 425 – FirstStreet SW, Calgary Alberta, T2P 3L8. Communications will be referred to the Presiding Director forappropriate action.  The status of alloutstanding concerns addressed to the Presiding Director will be reported tothe board of directors as appropriate.

**Corporate Governance Guidelines**

In accordance with the rules of the New York StockExchange, Penn West has adopted corporate governance guidelines, entitled “GovernanceGuidelines”, that are available for viewing on Penn West’s website at www.pennwest.com and are available inprint to any unitholder who requests a copy of them.  Requests for copies of the Governance Guidelinesshould be made by contacting:  investorrelations by phone (888) 770-2633 or by e-mail toinvestor_relations@pennwest.com.

**Board Committee Mandates**

The Mandates of Penn West’s audit committee, humanresources and compensation committee, governance committee, reserves committeeand health, safety and environment committee are each available for viewing onPenn West’s website at www.pennwest.com, and are available in print to anyunitholder who requests them.  Requestsfor copies of these documents should be made by contacting: investor relationsby phone (888) 770-2633 or by e-mail to investor_relations@pennwest.com.

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**UNDERTAKING AND CONSENT TO SERVICE OF PROCESS**

**A.****                                    Undertaking.**

Penn Westundertakes to make available, in person or by telephone, representatives torespond to inquiries made by the Securities and Exchange Commission (the “Commission”)staff, and to furnish promptly, when requested to do so by the Commissionstaff, information relating to:  thesecurities registered pursuant to Form  40-F; the securities in relation to which the obligation to file anannual report on Form 40-F arises; or transactions in said securities.

**B.****                                    Consentto Service of Process.**

Penn West haspreviously filed a Form F-X in connection with the class of securities in relationto which the obligation to file this report arises.

Any change to thename or address of the agent for service of process of Penn West shall becommunicated promptly to the Commission by an amendment to the Form F-Xreferencing the file number of the relevant registration statement.

**SIGNATURES**

Pursuant to therequirements of the Exchange Act, Penn West certifies that it meets all of therequirements for filing on Form 40-F and has duly caused this annual report tobe signed on its behalf by the undersigned, thereunto duly authorized, on March26, 2007.
| ** ** | **PENN WEST ENERGY TRUST** |
|------------|----------------------------|
| ** ** | **By:**                    | **Penn West Petroleum Ltd., its  administrator** |
| ** ** | ** **                 | ** ** |
| ** ** | ** **                 | ** ** |
|       | By:                        | /s/ William E. Andrew |
|       | Name:                      | William E. Andrew |
|       | Title:                     | President and Chief  Executive Officer |
|            |                            |  |  |

 

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**EXHIBIT INDEX**
| Exhibit | ** ** | **Description**                                                                                                                                                    |
|---------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |       |                                                                                                                                                               |
| 99.1    |       | Annual Information Form for the fiscal year ended  December 31, 2006                                                                                               |
|    |       |                                                                                                                                                               |
| 99.2    |       | Management’s Discussion and Analysis of Financial  Condition and Results of Operations for the fiscal year ended December 31,  2006                           |
|    |       |                                                                                                                                                               |
| 99.3    |       | Consolidated Financial Statements for the fiscal  year ended December 31, 2006                                                                                     |
|    |       |                                                                                                                                                               |
| 99.4    |       | Supplemental Note to the Consolidated Financial  Statements relating to the reconciliation of Canadian and United States  Generally Accepted Accounting Principles |
|    |       |                                                                                                                                                               |
| 99.5    |       | Certification of Chief Executive Officer pursuant to  Rule 13a-14(a) or 15d-14 of the Securities Exchange Act of 1934                                              |
|    | ** ** | ** **                                                                                                                                                         |
| 99.6    |       | Certification of Chief Financial Officer pursuant to  Rule 13a-14(a) or 15d-14 of the Securities Exchange Act of 1934                                              |
|    |       |                                                                                                                                                               |
| 99.7    |       | Certification of Chief Executive Officer pursuant to  18 U.S.C. Section 1350                                                                                       |
|    |       |                                                                                                                                                               |
| 99.8    |       | Certification of Chief Financial Officer pursuant to  18 U.S.C. Section 1350                                                                                       |
|    |       |                                                                                                                                                               |
| 99.9    |       | Consent of KPMG LLP                                                                                                                                                |
|    |       |                                                                                                                                                               |
| 99.10   |       | Consent of GLJ Petroleum Consultants Ltd.                                                                                                                          |

 

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