Exhibit
99.4




AUDITORS'
REPORT ON RECONCILIATION TO UNITED STATES GAAP




To the
Board of Directors of Penn West Petroleum Ltd., the administrator of Penn West
Energy Trust




On March
18, 2010, we reported on the consolidated balance sheets of Penn West Energy
Trust (“Penn West”) as at December 31, 2009 and 2008 and the consolidated
statements of operations and retained earnings (deficit) and cash flows for the
years then ended, which are included in the annual report on Form 40-F. In
connection with our audits of the aforementioned consolidated financial
statements, we also have audited the related supplemental note entitled
"Reconciliation of Canadian and United States Generally Accepted Accounting
Principles". This supplemental note is the responsibility of Penn West's
management. Our responsibility is to express an opinion on this supplemental
note based on our audits.




In our
opinion, such supplemental note, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.







/s/ KPMG
LLP


Chartered
Accountants


Calgary,
Canada


March 18,
2010





Reconciliation
of Canadian and United States Generally Accepted Accounting
Principles





Canadian
Generally Accepted Accounting Principles (“GAAP”) vary in certain respects from
U.S. GAAP. As required by the United States Securities and Exchange Commission,
the effect of these differences in principles on Penn West Energy Trust’s (“Penn
West”) consolidated financial statements is described and quantified
below:





The
application of U.S. GAAP would have the following effects on reported net income
(loss):


Year ended December 31Restated2009
            
            
            2008(CAD
      millions, except per unit amounts)Net
      and Comprehensive Income (Loss) as reported in theConsolidated
      Statements of Operations - Canadian GAAP
            
            $
            (144
            )
            
            $
            1,221AdjustmentsUnit-based
      compensation (note (b))
            
            
            20
            
            
            
            71Impairment
      charge (note (a))
            
            
            -
            
            
            
            (8,111
            )Depletion
      & depreciation (note (a))
            
            
            922
            
            
            
            (33
            )Income tax effect of the above
      adjustments
            
            
            (218
            )
            
            
            1,931Net and Comprehensive Income (Loss), U.S. GAAP, as
      adjusted
            
            $
            580
            
            
            $
            (4,921
            )Net
      income (loss) per trust unit, as adjustedBasic
            
            $
            1.40
            
            
            $
            (13.10
            )Diluted
            
            
            1.40
            
            
            
            (13.10
            )Weighted
      average number of trust units outstanding (millions)Basic
            
            
            412.9
            
            
            
            375.6Diluted
            
            
            414.2
            
            
            
            377.2Deficit
      - U.S. GAAPBalance,
      beginning of the year - U.S. GAAP
            
            $
            (2,818
            )
            
            $
            (1,413
            )Net
      income (loss) - U.S. GAAP
            
            
            580
            
            
            
            (4,921
            )Change
      in redemption value of Trust units (note (c))
            
            
            (1,982
            )
            
            
            5,066Distributions declared
            
            
            (841
            )
            
            
            (1,550
            )Balance, end of year - U.S.
      GAAP
            
            $
            (5,061
            )
            
            $
            (2,818
            )





The
application of U.S. GAAP would have the following effects on the reported
balance sheets:


Canadian
            
            
            U.S.December 31, 2009 (CAD
      millions)
            
            GAAP
            
            
            GAAPASSETSCurrentAccounts
      receivable
            
            $
            371
            
            
            $
            371Future
      income taxes
            
            
            37
            
            
            
            37Other
            
            
            101
            
            
            
            101509
            
            
            
            509Property,
      plant and equipment (note (a))
            
            
            11,347
            
            
            
            4,125Goodwill
            
            
            2,020
            
            
            
            2,020Future income taxes
            
            
            -
            
            
            
            54413,367
            
            
            
            6,689$
            13,876
            
            
            $
            7,198LIABILITIES
      AND UNITHOLDERS' EQUITY (DEFICIENCY)CurrentAccounts
      payable and accrued liabilities
            
            $
            515
            
            
            $
            515Distributions
      payable
            
            
            63
            
            
            
            63Convertible
      debentures
            
            
            18
            
            
            
            18Risk management
            
            
            130
            
            
            
            130726
            
            
            
            726Long-term
      debt
            
            
            3,219
            
            
            
            3,219Convertible
      debentures
            
            
            255
            
            
            
            255Risk
      management
            
            
            21
            
            
            
            21Asset
      retirement obligations
            
            
            568
            
            
            
            568Unit
      rights liability (note (b))
            
            
            -
            
            
            
            40Future income taxes
            
            
            1,169
            
            
            
            -Total liabilities
            
            
            5,958
            
            
            
            4,829Unitholders'
      mezzanine equity (note (c))
            
            
            -
            
            
            
            7,430Unitholders'
      equity (deficiency)Unitholders'
      capital (note (c))
            
            
            8,451
            
            
            
            -Contributed
      surplus (note (b))
            
            
            123
            
            
            
            -Deficit (note (c))
            
            
            (656
            )
            
            
            (5,061
            )7,918
            
            
            
            (5,061
            )$
            13,876
            
            
            $
            7,198







Canadian
            
            
            U.S.December 31, 2008 (CAD
      millions)
            
            GAAP
            
            
            GAAPRestatedASSETSCurrentAccounts
      receivable
            
            $
            386
            
            
            $
            386Risk
      management
            
            
            448
            
            
            
            448Other
            
            
            106
            
            
            
            106940
            
            
            
            940Property,
      plant and equipment (note (a))
            
            
            12,452
            
            
            
            4,308Goodwill
            
            
            2,020
            
            
            
            2,020Future income taxes
            
            
            -
            
            
            
            56314,472
            
            
            
            6,891$
            15,412
            
            
            $
            7,831LIABILITIES
      AND UNITHOLDERS' EQUITY (DEFICIENCY)CurrentAccounts
      payable and accrued liabilities
            
            $
            630
            
            
            $
            630Distributions
      payable
            
            
            132
            
            
            
            132Convertible
      debentures
            
            
            7
            
            
            
            7Future income taxes
            
            
            132
            
            
            
            132901
            
            
            
            901Long-term
      debt
            
            
            3,854
            
            
            
            3,854Convertible
      debentures
            
            
            289
            
            
            
            289Risk
      management
            
            
            6
            
            
            
            6Asset
      retirement obligations
            
            
            614
            
            
            
            614Unit
      rights liability (note (b))
            
            
            -
            
            
            
            2Future income taxes
            
            
            1,368
            
            
            
            -Total liabilities
            
            
            7,032
            
            
            
            5,666Unitholders'
      mezzanine equity (note (c))
            
            
            -
            
            
            
            4,983Unitholders'
      equity (deficiency)Unitholders'
      capital (note (c))
            
            
            7,976
            
            
            
            -Contributed
      surplus (note (b))
            
            
            75
            
            
            
            -Retained earnings (deficit) (note
      (c))
            
            
            329
            
            
            
            (2,818
            )8,380
            
            
            
            (2,818
            )$
            15,412
            
            
            $
            7,831





The
application of U.S. GAAP would have no effect on the statement of cash
flows.





(a)
Property, plant and equipment and depletion and depreciation




Under
Canadian GAAP, an impairment exists when the net book value of the petroleum and
natural gas properties exceeds the sum of the undiscounted future cash flows
from proved reserves calculated using forecast prices and costs, and the cost of
unproved properties. If an impairment is determined to exist, the impairment is
measured as the amount by which the net book value of the petroleum and natural
gas properties exceeds the sum of the present value of future cash flows from
proved plus probable reserves using forecast prices and costs, and the lower of
cost, less any impairment of unproved properties.




On
December 31, 2009, the changes announced by the SEC in December 2008 to
modernize the oil and gas reporting requirements became effective, which led to
a change in the impairment test. This new guidance is considered a change in
estimate and will be applied prospectively. Under these new guidelines, the net
book value of petroleum and natural gas properties, net of deferred income
taxes, is limited to the present value of after-tax future net cash flows from
proved reserves, discounted at 10 percent and using an average price based on
the first day of the month for the prior 12-month period and costs at the
balance sheet date, plus the lower of cost, less any impairment of unproved
properties. Previously, prices were based on those at the balance sheet date or,
if elected by Penn West, recalculated seven business days prior to the filing
date of Penn West’s consolidated financial statements if an impairment was
indicated on the balance sheet date. If there was an impairment indicated at the
balance sheet date, which no longer existed at the time of the second test, no
write-down was required.





Based on
these new pricing guidelines, at December 31, 2009 no impairment was indicated
(2008 - $8,111 million). Future net revenues in the impairment test were based
on prices of $3.74 per mcf (2008 - $6.28 per mcf) for natural gas and $57.72 per
barrel (2008 - $38.06 per barrel) for liquids.





In
compiling its 2009 US GAAP information, Penn West discovered the tax rate was
applied incorrectly in the year-end 2008 US GAAP ceiling test. The 2008
comparative figures included with the 2009 US GAAP information have been revised
accordingly. The impact on the statement of operations for the year ended
December 31, 2008 was an increase to impairment charge, income tax recovery and
net and comprehensive loss of $1.9 billion, $458 million and $1.5 billion,
respectively, with an increase to the basic and diluted net loss per trust unit
of $3.92 per trust unit for the year ended December 31, 2008. The impact on the
balance sheet as at December 31, 2008 was a reduction to property, plant and
equipment of $1.9 billion, an increase in future income tax asset of $458
million and an increase in deficit of $1.5 billion.





Depletion
and depreciation of resource properties is calculated using the
unit-of-production method based on production volumes before royalties in
relation to proved reserves. All of Penn West’s reserves were evaluated or
audited by independent petroleum engineers in both 2009 and 2008. In determining
the depletable base, the estimated future costs to be incurred in developing
proved reserves are included and the estimated equipment salvage values and the
lower of cost, less any impairment of unevaluated properties is excluded.
Significant natural gas processing facilities, net of estimated salvage values,
are depreciated using the declining balance method. Depletion and depreciation
per gross equivalent barrel is calculated by converting natural gas volumes to
barrels of oil equivalent (“BOE”) using a ratio of 6 mcf of natural gas to one
barrel of crude oil. As a result of using proved reserves at the balance sheet
date and the impairment charge recorded in 2008, depletion and depreciation was
lower than that recorded under Canadian GAAP by $922 million in 2009 (2008 - $33
million higher). Depletion and depreciation per BOE as calculated under U.S.
GAAP for the year ended December 31, 2009 was $9.15 (2008 - $139.88), which
included the impairment charge and the depletion and depreciation GAAP
difference.





(b) Unit-based
compensation





Under
U.S. GAAP, the trust unit rights are treated as a liability which is calculated
based on the fair value of the grants, determined by the Binomial Lattice model
at each reporting date until the date of settlement. Compensation cost is
recorded based on the change in fair value of the rights during each reporting
period. When rights are exercised, the proceeds received plus the amount
recorded as a trust unit rights liability is recorded as mezzanine equity. Penn
West issues units from treasury to settle unit rights exercises.





Rights
granted under the rights plan are considered equity awards for Canadian GAAP
purposes, a difference from U.S. GAAP. Unit-based compensation is based upon the
fair value of rights issued, determined only on the grant date. This initial
fair value is charged to income over the vesting period of the rights with a
corresponding increase in contributed surplus. When rights are exercised, the
consideration received plus the value recorded in contributed surplus is
transferred to unitholders’ equity. Contributed surplus amounts are not
recognized under U.S. GAAP. Under U.S. GAAP, for the year ended 2009,
compensation cost calculated was $20 million lower (2008 - $71 million) than
compensation cost calculated under Canadian GAAP. The compensation cost was
allocated as follows:





Year ended December 31(millions)
            2009
            
            2008Field employees
            
            $
            (8
            )
            
            $
            7Corporate employees
            
            
            (24
            )
            
            
            19Compensation recovery
    (expense)
            
            $
            (32
            )
            
            $
            26





The total
fair value under U.S. GAAP of non-vested trust unit rights not recorded and
trust unit rights vested during the year were as follows:


As
      at December 31Total
      Fair Value
              (millions)
            
            
            Weighted
      Remaining
              Contractual
      Life (years)2009
            
            
            2008
            
            
            2009
            
            
            2008Non-vested
      options
            
            $
            72
            
            
            $
            106
            
            
            
            1.9
            
            
            
            2.1Vested
            
            $
            31
            
            
            $
            19
            
            
            
            1.3
            
            
            
            1.2





If
certain conditions are met, exercise prices are adjusted for distributions, at
the option of the employee. On this basis, the total intrinsic value at December
31, 2009 for trust unit rights outstanding was $96 million (2008 - $nil), for
trust unit rights exercisable was $17 million (2008 - $nil) and for trust unit
rights exercised during the year was $3 million (2008 - $nil).





A GAAP
difference exists in the calculation of the number of diluted weighted average
trust units considered outstanding for the calculation of earnings per share.
The U.S. GAAP amount includes proceeds on assumed exercises of unit rights based
on the fair value at each balance sheet date, compared to the fair value at only
the date of grant under Canadian GAAP, resulting in a different number of units
included in the per unit calculations. For the year ended December 31, 2009,
25.2 million trust unit rights (2008 – 15.8 million) and 4.8 million units that
would be issued on the conversion of the convertible debentures (2008 – 5.7
million) were excluded in calculating the weighted average number of diluted
trust units outstanding as they were considered anti-dilutive under U.S.
GAAP.





(c) Unitholders’ mezzanine
equity




U.S. GAAP
requires that trust units, which are redeemable at the option of the unitholder
irrespective of the amounts which may be redeemed, be valued at their redemption
amount and presented as temporary equity on the balance sheet. The redemption
value of the Penn West trust units is determined based on 95% of the market
value of the trust units at each balance sheet date. Under Canadian GAAP, all
trust units are classified as unitholders’ equity. Penn West reclassified $7,430
million at December 31, 2009 (December 31, 2008 - $4,983 million) as
unitholders’ mezzanine equity in accordance with U.S. GAAP.





Changes
in unitholders’ mezzanine equity, trust units issued net of redemptions, net
income and distributions in a period are recognized as charges to deficit. Penn
West recorded an increase of $1,982 million to deficit for the year ended
December 31, 2009, compared to a reduction of $5,066 million for the same period
of 2008 to reflect the changes in unitholders’ mezzanine equity.





(d)
Acquisitions





Penn West
accounted for the Reece Energy Exploration Corp. (“Reece”), Canetic Resources
Trust (“Canetic”), Vault Energy Trust (“Vault”) and Endev Energy Inc. (“Endev”)
acquisitions as purchases. The consolidated financial statements of Penn West
include the results of operations, funds flow and net income of Reece from the
closing date of April 30, 2009, of Canetic from the closing date of January 11,
2008, of Vault from the closing date of January 10, 2008 and of Endev from the
closing date of July 22, 2008. If the Reece acquisition had occurred on January
1, 2009 and 2008, and the Canetic, Vault and Endev acquisitions had occurred on
January 1, 2008, Penn West would have realized the following U.S. GAAP pro forma
results for the years ended December 31:





(unaudited)
            
            2009
            
            
            2008Revenue
      ($CAD millions)
            
            $
            2,375
            
            
            $
            4,159Net
      income (loss) ($CAD millions)
            
            
            581
            
            
            
            (4,922
            )Basic
      per unit
            
            
            1.40
            
            
            
            (12.74
            )Diluted
      per unit
            
            $
            1.40
            
            
            $
            (12.74
            )





(e)
Additional disclosure





Under
Canadian GAAP, Penn West presents oil and natural gas revenues and royalty
income prior to royalties payable in the Consolidated Statement of Operations
and Retained Earnings. Under U.S. GAAP, these items would be combined and
presented on a net basis in the Consolidated Statement of Operations and
Retained Earnings (Deficit).





(f)
Income Taxes





As at
December 31, 2009, the total amount of Penn West’s unrecognized tax benefits was
approximately $10 million including $3 million of interest and penalties, which
if recognized would affect Penn West’s effective income tax rate. The resolution
of these tax positions may take a number of years to complete with the
appropriate tax authorities, thus fluctuations could occur from period to
period.





The
change in the amount of unrecognized tax benefits is as follows:





As
      at December 31(millions)
            2009
            
            2008Balance,
      beginning of period
            
            $
            10
            
            
            $
            9Additions/
      resolutions for the period
            
            
            -
            
            
            
            1Balance,
      end of period
            
            $
            10
            
            
            $
            10





Penn West
and its entities are subject to income taxation and related audits in Canada.
The tax years from 2002 to 2009 remain open to audit by Canadian tax
authorities.





Change
in estimate





On
December 31, 2009, Penn West prospectively adopted the revisions to modernize
oil and gas reporting requirements as announced by the SEC in December 2008.
These new requirements include a change to the price used in calculating
reserves from a single-day closing price measured on the last day of an entity’s
fiscal year to a 12-month average price calculated as the unweighted arithmetic
average of the first-day-of-the-month price for each month within the 12-month
period prior to the end of the reporting period. Additional changes to oil and
gas reserves disclosures were also provided.





Changes
in accounting policies





On
January 1, 2009, Penn West prospectively adopted “Business Combinations”. This
Statement outlines principles for the acquirer on recognizing assets acquired
and liabilities assumed in a transaction, establishes the acquisition date fair
value for all assets and liabilities purchased and the requirement for
additional disclosures for users of the financial statements to evaluate the
business combination. The adoption of this standard had no material impact on
Penn West’s financial statements.





On
January 1, 2009, Penn West prospectively adopted “Non-Controlling Interests in
Consolidated Financial Statements”. This pronouncement requires entities to
report non-controlling interests as equity in the consolidated financial
statements. The adoption of this standard had no material impact on Penn West’s
financial statements.





On
January 1, 2009, Penn West prospectively adopted “Disclosures about Derivative
Instruments and Hedging Activities”. This is an amendment to the previously
issued “Accounting for Derivative Instruments and Hedging Activities”. This
Statement outlines additional disclosure requirements for derivative instruments
and hedging activities to offer further information and transparency to users of
the financial statements. The adoption had no material impact on Penn West’s
financial statements.





On April
1, 2009, Penn West prospectively adopted “Subsequent Events”. This pronouncement
outlines specific disclosures for events occurring after the balance sheet date
but prior to the date the financial statements are issued. The adoption of this
standard had no material impact on Penn West’s financial
statements.





SUPPLEMENTARY
OIL AND GAS INFORMATION - (UNAUDITED)





The
following disclosures in this section provide oil and gas information in
accordance with the U.S. standard, “Disclosures about Oil and Gas Producing
Activities”.





NET PROVED OIL AND GAS
RESERVES





Penn West
engaged independent qualified reserve evaluators, GLJ Petroleum Consultants Ltd.
(“GLJ”) and Sproule Associates Ltd. (“Sproule”), to evaluate Penn West’s proved
developed and proved undeveloped oil and gas reserves or to audit Penn West’s
evaluation thereof. As at December 31, 2009, all of Penn West’s oil and gas
reserves are located in Canada and the United States of which less than one
percent of our proved reserves are located in the United States. The changes in
our net proved reserve quantities are outlined below.





Net
reserves include Penn West’s remaining royalty and working interest reserves,
less all Crown, freehold, and overriding royalties and other interests that are
not owned by Penn West.





Proved
reserves are those estimated quantities of crude oil, natural gas and natural
gas liquids that can be estimated with a high degree of certainty to be
economically recoverable under existing economic and operating
conditions.





Proved
developed reserves are those proved reserves that are expected to be recovered
from existing wells and installed facilities or, if facilities have not been
installed, that would involve a low expenditure to put the reserves on
production. Proved developed reserves may be subdivided into producing and
non-producing.





Proved
undeveloped reserves are those reserves that are expected to be recovered from
known accumulations where a significant expenditure is required to render them
capable of production.





Penn West
cautions users of this information as the process of estimating crude oil and
natural gas reserves is subject to a level of uncertainty. The reserves are
based on economic and operating conditions; therefore, changes can be made to
future assessments as a result of a number of factors, which can include new
technology, changing economic conditions and development activity.





YEAR
      ENDED DECEMBER 31, 2009CONSTANT
      PRICES AND COSTSNet Proved Developed and Proved Undeveloped
      Reserves(1)
            
            Light and Medium Oil
              (mmbbl)
            
            
            Heavy Oil (mmbbl)
            
            
            Natural Gas
              (bcf)
            
            
            Natural Gas Liquids (mmbbl)
            
            
            Barrels of Oil Equivalent
      (mmboe)December
      31, 2008
            
            
            214
            
            
            
            39
            
            
            
            875
            
            
            
            18
            
            
            
            416Extensions
      & Discoveries
            
            
            11
            
            
            
            -
            
            
            
            16
            
            
            
            -
            
            
            
            14Improved
      Recovery
            
            
            7
            
            
            
            2
            
            
            
            3
            
            
            
            -
            
            
            
            9Technical
      Revisions
            
            
            15
            
            
            
            23
            
            
            
            (34
            )
            
            
            1
            
            
            
            33Acquisitions
            
            
            3
            
            
            
            -
            
            
            
            6
            
            
            
            -
            
            
            
            4Dispositions
            
            
            (1
            )
            
            
            (7
            )
            
            
            (38
            )
            
            
            (1
            )
            
            
            (15
            )Production
            
            
            (21
            )
            
            
            (8
            )
            
            
            (135
            )
            
            
            (3
            )
            
            
            (54
            )Change for the year
            
            
            14
            
            
            
            10
            
            
            
            (182
            )
            
            
            (3
            )
            
            
            (9
            )December 31, 2009
            
            
            228
            
            
            
            49
            
            
            
            693
            
            
            
            16
            
            
            
            408Developed
            
            
            187
            
            
            
            47
            
            
            
            647
            
            
            
            15
            
            
            
            356Undeveloped
            
            
            42
            
            
            
            2
            
            
            
            47
            
            
            
            1
            
            
            
            52Total(2)
            
            
            228
            
            
            
            49
            
            
            
            693
            
            
            
            16
            
            
            
            408





YEAR
      ENDED DECEMBER 31, 2008CONSTANT
      PRICES AND COSTSNet Proved Developed and Proved Undeveloped
      Reserves(1)
            
            Light and Medium Oil
              (mmbbl)
            
            
            Heavy Oil (mmbbl)
            
            
            Natural Gas
              (bcf)
            
            
            Natural Gas Liquids (mmbbl)
            
            
            Barrels of Oil Equivalent
      (mmboe)December
      31, 2007
            
            
            174
            
            
            
            41
            
            
            
            575
            
            
            
            12
            
            
            
            323Extensions
      & Discoveries
            
            
            5
            
            
            
            1
            
            
            
            20
            
            
            
            -
            
            
            
            9Improved
      Recovery
            
            
            2
            
            
            
            -
            
            
            
            4
            
            
            
            -
            
            
            
            3Technical
      Revisions
            
            
            (13
            )
            
            
            (4
            )
            
            
            19
            
            
            
            -
            
            
            
            (14
            )Acquisitions
            
            
            68
            
            
            
            9
            
            
            
            406
            
            
            
            9
            
            
            
            153Dispositions
            
            
            -
            
            
            
            -
            
            
            
            (12
            )
            
            
            -
            
            
            
            (2
            )Production
            
            
            (22
            )
            
            
            (8
            )
            
            
            (137
            )
            
            
            (3
            )
            
            
            (56
            )Change for the year
            
            
            40
            
            
            
            (2
            )
            
            
            300
            
            
            
            6
            
            
            
            93December 31, 2008
            
            
            214
            
            
            
            39
            
            
            
            875
            
            
            
            18
            
            
            
            416Developed
            
            
            180
            
            
            
            34
            
            
            
            823
            
            
            
            17
            
            
            
            369Undeveloped
            
            
            34
            
            
            
            5
            
            
            
            52
            
            
            
            1
            
            
            
            47Total(2)
            
            
            214
            
            
            
            39
            
            
            
            875
            
            
            
            18
            
            
            
            416





(1)
            Columns
      may not add due to rounding.


(2)
            Penn
      West does not file any estimates of total net proved crude oil or natural
      gas reserves with any U.S. federal authority or agency other than the
      SEC.





CAPITALIZED
COSTS





As
      at December 31,  ($CAD millions)
            
            2009
            
            
            2008
            
            
            2007Proved
      oil and gas properties
            
            $
            17,536
            
            
            $
            17,030
            
            
            $
            10,622Unproved
      oil and gas properties
            
            
            393
            
            
            
            490
            
            
            
            303Total
      capitalized costs
            
            
            17,929
            
            
            
            17,520
            
            
            
            10,925Accumulated
      depletion and depreciation
            
            
            (13,804
            )
            
            
            (13,212
            )
            
            
            (3,512
            )Net
      capitalized costs
            
            $
            4,125
            
            
            $
            4,308
            
            
            $
            7,413





COSTS
INCURRED





For
      the years ended December 31,  ($CAD millions)
            
            2009
            
            
            2008
            
            
            2007Property
      acquisition (disposition) costs (1)Proved
      oil and gas properties
            
            $
            (369
            )
            
            $
            (50
            )
            
            $
            422Unproved
      oil and gas properties
            
            
            19
            
            
            
            128
            
            
            
            30Exploration
      costs (2)
            
            
            79
            
            
            
            140
            
            
            
            102Development
      costs (3)
            
            
            546
            
            
            
            780
            
            
            
            530Capital
      expenditures
            
            
            275
            
            
            
            998
            
            
            
            1,084Corporate
      acquisitions
            
            
            116
            
            
            
            5,525
            
            
            
            21Total
      expenditures
            
            $
            391
            
            
            $
            6,523
            
            
            $
            1,105





(1)
            Acquisitions
      are net of disposition of
properties.


(2)
            Cost
      of geological and geophysical capital expenditures and drilling costs for
      exploration wells drilled.


(3)
            Includes
      equipping and facilities capital
expenditures.





RESULTS OF OPERATIONS OF
PRODUCING ACTIVITIES





For
      the years ended December 31,  ($CAD millions)
            
            2009
            
            
            2008
            
            
            2007Oil
      and gas sales, net of royalties and commodity contracts
            
            $
            2,154
            
            
            $
            4,413
            
            
            $
            1,827Lease
      operating costs and capital taxes
            
            
            (979
            )
            
            
            (865
            )
            
            
            (536
            )Transportation
      costs
            
            
            (34
            )
            
            
            (34
            )
            
            
            (24
            )Depletion,
      depreciation and accretion
            
            
            (634
            )
            
            
            (9,738
            )
            
            
            (897
            )Income
      taxes (1)
            
            
            -
            
            
            
            -
            
            
            
            -Results
      of operations
            
            $
            507
            
            
            $
            (6,224
            )
            
            $
            370





(1)
            Penn
      West is currently not cash taxable.




STANDARDIZED MEASURE OF
DISCOUNTED FUTURE NET CASH FLOWS AND CHANGES THEREIN





The
standardized measure of discounted future net cash flows is based on estimates
made or audited by GLJ and Sproule of net proved reserves. Future cash inflows
are computed based on constant prices and cost assumptions applied against
annual future production from proved crude oil and natural gas reserves. Future
development and production costs are based on constant price assumptions and
assume the continuation of existing economic conditions. Constant prices are an
average of the first day of the month price for the prior 12-month period.
Future income taxes are calculated by applying statutory income tax rates. Penn
West is currently not cash taxable. The standardized measure of discounted
future net cash flows is computed using a 10 percent discount
factor.





Penn West
cautions users of this information that the discounted future net cash flows
relating to proved oil and gas reserves are neither an indication of the fair
market value of our oil and gas properties, nor of the future net cash flows
expected to be generated from such properties. The discounted future cash flows
do not include the fair market value of exploratory properties and probable or
possible oil and gas reserves, nor is consideration given to the effect of
anticipated future changes in crude oil and natural gas prices, development,
asset retirement and production costs and possible changes to tax and royalty
regulations. The prescribed discount rate of 10 percent is arbitrary and may not
appropriately reflect future interest rates.







($CAD
      millions)
            
            2009
            
            
            2008Future
      cash inflows
            
            $
            19,726
            
            
            $
            16,030Future
      production costs
            
            
            (11,090
            )
            
            
            (8,816
            )Future
      development costs
            
            
            (1,047
            )
            
            
            (979
            )Undiscounted
      pre-tax cash flows
            
            
            7,589
            
            
            
            6,235Future
      income taxes (1)
            
            
            (22
            )
            
            
            -Future
      net cash flows
            
            
            7,567
            
            
            
            6,235Less
      10% annual discount factor
            
            
            (3,170
            )
            
            
            (2,465
            )Standardized
      measure of discounted future net cash flows
            
            $
            4,397
            
            
            $
            3,770





(1)
            Penn
      West is currently not cash taxable.





($CAD
      millions)
            
            2009
            
            
            2008Estimated
      future net revenue at beginning of year
            
            $
            3,770
            
            
            $
            7,014Oil
      and gas sales during period net of production costs and royalties (1)
            
            
            (1,708
            )
            
            
            (2,865
            )Changes
      due to prices and royalties related to forecast production (2)
            
            
            1,635
            
            
            
            (3,307
            )Development
      costs during the period (3)
            
            
            688
            
            
            
            936Changes
      in forecast development costs (4)
            
            
            (476
            )
            
            
            (866
            )Changes
      resulting from extensions and improved recovery (5)
            
            
            225
            
            
            
            106Changes
      resulting from discoveries (5)
            
            
            4
            
            
            
            4Changes
      resulting from acquisitions of reserves (5)
            
            
            47
            
            
            
            1,393Changes
      resulting from dispositions of reserves (5)
            
            
            (166
            )
            
            
            (22
            )Discount
      factor (6)
            
            
            377
            
            
            
            701Net
      change in income tax (7)
            
            
            (1
            )
            
            
            -Changes
      resulting from technical reserves revision
            
            
            152
            
            
            
            (129
            )All
      other changes (8)
            
            
            (150
            )
            
            
            805Estimated
      future net revenue at end of year
            
            $
            4,397
            
            
            $
            3,770





(1)
            Company
      actual before income taxes, excluding general and administrative
      expenses.


(2)
            The
      impact of changes in prices and other economic factors on future net
      revenue.


(3)
            Actual
      capital expenditures relating to the exploration, development and
      production of oil and gas reserves.


(4)
            The
      change in forecast development
costs.


(5)
            End
      of period net present value of the related
  reserves.


(6)
            Estimated
      as 10 percent of the beginning of period net present
  value.


(7)
            The
      difference between forecast income taxes at beginning of period and the
      actual taxes for the period plus forecast income taxes at the end of
      period. Penn West is a Trust that will become taxable in
    2011.


(8)
            Includes
      changes due to revised production profiles, development timing, operating
      costs, royalty rates and actual prices received versus
      forecast.