|  |   | KPMGLLPChartered Accountants2700 205 - 5th  Avenue SWCalgary AB  T2P 4B9 |   | Telephone    (403) 691-8000Telefax         (403) 691-8008Internet         www.kpmg.ca |
|--|--------|----------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|  |   | KPMGLLPChartered Accountants2700 205 - 5th  Avenue SWCalgary AB  T2P 4B9 |   | Telephone    (403) 691-8000Telefax         (403) 691-8008Internet         www.kpmg.ca |
|--|--------|----------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                             |   | Year ended December 31 |   |
|------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                             |   | 2010                                  |   |   | 2009 |   |
| (CAD millions, except per unit amounts)                          |   |                                  |   |   |   |   |
| Net and comprehensive Income (Loss) as reported in the           |   |                                  |   |   |   |   |
| Consolidated statements of operations – Canadian GAAP      |   | $                                     | 226    |   |   | $ | (144 | ) |
| Adjustments                                                      |   |                                  |   |   |   |   |   |   |
| Unit-based compensation (note (b))                               |   |                                  | (78    | ) |   |   | 20 |   |
| Depletion and depreciation (note (a))                            |   |                                  | 832    |   |   |   | 922 |   |
| Income tax effect of the above adjustments                       |   |                                  | (203   | ) |   |   | (218 | ) |
| Net and other comprehensive income, U.S. GAAP, as adjusted       |   | $                                     | 777    |   |   | $ | 580 |   |
|                                                             |   |                                  |   |   |   |   |   |   |
| Net income per trust unit                                        |   |                                  |   |   |   |   |   |   |
| Basic                                                            |   | $                                     | 1.76   |   |   | $ | 1.40 |   |
| Diluted                                                          |   | $                                     | 1.74   |   |   | $ | 1.40 |   |
|                                                             |   |                                  |   |   |   |   |   |   |
| Weighted average number of trust units outstanding (in millions) |   |                                  |   |   |   |   |   |   |
| Basic                                                            |   |                                  | 441.8  |   |   |   | 412.9 |   |
| Diluted                                                          |   |                                  | 445.7  |   |   |   | 414.2 |   |
|                                                             |   |                                  |   |   |   |   |   |   |
| Deficit - U.S. GAAP                                              |   |                                  |   |   |   |   |   |   |
| Balance, beginning of year - U.S. GAAP                           |   | $                                     | (5,061 | ) |   | $ | (2,818 | ) |
| Net income - U.S. GAAP                                           |   |                                  | 777    |   |   |   | 580 |   |
| Change in redemption value of trust units (note (c))             |   |                                  | (2,287 | ) |   |   | (1,982 | ) |
| Distributions declared                                           |   |                                  | (686   | ) |   |   | (841 | ) |
| Balance, end of year - U.S. GAAP                                 |   | $                                     | (7,257 | ) |   | $ | (5,061 | ) |

----

|                                             |   | Canadian |   |   | U.S.   |   |
|--------------------------------------------------|--------|----------|--------|--------|--------|--------|
| December 31, 2010 (CAD millions)                 |   | GAAP     |   |   | GAAP   |   |
|                                             |   |     |   |   |   |   |
| ASSETS                                           |   |     |   |   |   |   |
| Current                                          |   |     |   |   |   |   |
| Accounts receivable                              |   | $        | 386    |   |   | $      | 386 |   |
| Future income taxes                              |   |     | 17     |   |   |   | 17 |   |
| Other                                            |   |     | 87     |   |   |   | 87 |   |
|                                             |   |     | 490    |   |   |   | 490 |   |
|                                             |   |     |   |   |   |   |   |   |
| Deferred funding obligation                      |   |     | 678    |   |   |   | 678 |   |
| Property, plant and equipment (note (a))         |   |     | 10,180 |   |   |   | 3,790 |   |
| Goodwill                                         |   |     | 2,020  |   |   |   | 2,020 |   |
| Future income taxes                              |   |     | -      |   |   |   | 655 |   |
|                                             |   |     | 12,878 |   |   |   | 7,143 |   |
|                                             |   | $        | 13,368 |   |   | $      | 7,633 |   |
|                                             |   |     |   |   |   |   |   |   |
| LIABILITIES AND UNITHOLDERS' EQUITY (DEFICIENCY) |   |     |   |   |   |   |   |   |
| Current                                          |   |     |   |   |   |   |   |   |
| Accounts payable and accrued liabilities         |   | $        | 743    |   |   | $      | 743 |   |
| Distributions payable                            |   |     | 41     |   |   |   | 41 |   |
| Risk management                                  |   |     | 62     |   |   |   | 62 |   |
|                                             |   |     | 846    |   |   |   | 846 |   |
| Long-term debt                                   |   |     | 2,496  |   |   |   | 2,496 |   |
| Convertible debentures                           |   |     | 255    |   |   |   | 255 |   |
| Asset retirement obligations                     |   |     | 653    |   |   |   | 653 |   |
| Unit rights liability (note (b))                 |   |     | -      |   |   |   | 165 |   |
| Risk management                                  |   |     | 64     |   |   |   | 64 |   |
| Future income taxes                              |   |     | 855    |   |   |   | - |   |
| Total liabilities                                |   |     | 5,169  |   |   |   | 4,479 |   |
|                                             |   |     |   |   |   |   |   |   |
| Unitholders' mezzanine equity (note (c))         |   |     | -      |   |   |   | 10,411 |   |
|                                             |   |     |   |   |   |   |   |   |
| Unitholders' equity (deficiency)                 |   |     |   |   |   |   |   |   |
| Unitholders' capital (note (c))                  |   |     | 9,177  |   |   |   | - |   |
| Contributed surplus (note (b))                   |   |     | 138    |   |   |   | - |   |
| Deficit (note (c))                               |   |     | (1,116 | )      |   |   | (7,257 | ) |
|                                             |   |     | 8,199  |   |   |   | (7,257 | ) |
|                                             |   | $        | 13,368 |   |   | $      | 7,633 |   |

----

|                                             |   | Canadian |   |   | U.S.   |   |
|--------------------------------------------------|--------|----------|--------|--------|--------|--------|
| December 31, 2009 (CAD millions)                 |   | GAAP     |   |   | GAAP   |   |
|                                             |   |     |   |   |   |   |
| ASSETS                                           |   |     |   |   |   |   |
| Current                                          |   |     |   |   |   |   |
| Accounts receivable                              |   | $        | 371    |   |   | $      | 371 |   |
| Future income taxes                              |   |     | 37     |   |   |   | 37 |   |
| Other                                            |   |     | 101    |   |   |   | 101 |   |
|                                             |   |     | 509    |   |   |   | 509 |   |
|                                             |   |     |   |   |   |   |   |   |
| Property, plant and equipment (note (a))         |   |     | 11,347 |   |   |   | 4,125 |   |
| Goodwill                                         |   |     | 2,020  |   |   |   | 2,020 |   |
| Future income taxes                              |   |     | -      |   |   |   | 544 |   |
|                                             |   |     | 13,367 |   |   |   | 6,689 |   |
|                                             |   | $        | 13,876 |   |   | $      | 7,198 |   |
|                                             |   |     |   |   |   |   |   |   |
| LIABILITIES AND UNITHOLDERS' EQUITY (DEFICIENCY) |   |     |   |   |   |   |   |   |
| Current                                          |   |     |   |   |   |   |   |   |
| Accounts payable and accrued liabilities         |   | $        | 515    |   |   | $      | 515 |   |
| Distributions payable                            |   |     | 63     |   |   |   | 63 |   |
| Risk management                                  |   |     | 130    |   |   |   | 130 |   |
|                                             |   |     | 708    |   |   |   | 708 |   |
| Long-term debt                                   |   |     | 3,219  |   |   |   | 3,219 |   |
| Convertible debentures                           |   |     | 273    |   |   |   | 273 |   |
| Risk management                                  |   |     | 21     |   |   |   | 21 |   |
| Asset retirement obligations                     |   |     | 568    |   |   |   | 568 |   |
| Unit rights liability (note (b))                 |   |     | -      |   |   |   | 40 |   |
| Future income taxes                              |   |     | 1,169  |   |   |   | - |   |
| Total liabilities                                |   |     | 5,958  |   |   |   | 4,829 |   |
|                                             |   |     |   |   |   |   |   |   |
| Unitholders' mezzanine equity (note (c))         |   |     | -      |   |   |   | 7,430 |   |
|                                             |   |     |   |   |   |   |   |   |
| Unitholders' 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 |   |

----

----

|                 | Year ended December 31 |   |
|----------------------|------------------------|--------|
| (millions)           | 2010                   |   | 2009 |   |
| Field employees      |                   | $      | 32 |   |   | $ | 8 |   |
| Corporate employees  |                   |   | 93 |   |   |   | 24 |   |
| Compensation expense |                   | $      | 125 |   |   | $ | 32 |   |

|               |   | Year ended December 31 |   |   | As at December 31                                |   |
|--------------------|--------|---------------------------------------|--------|--------|-----------------------------------------------------------------|--------|
|               |   | Total Fair Value(millions)  |   |   | Weighted Remaining Contractual Life (years) |   |
|               |   | 2010                                  |   |   | 2009                                                            |   |   | 2010 |   |   | 2009 |   |
| Non-vested options |   | $                                     | 56     |   |                                                            | $      | 72 |   |   |   | 2.0 |   |   |   | 1.9 |   |
| Vested             |   | $                                     | 37     |   |                                                            | $      | 31 |   |   |   | 1.7 |   |   |   | 1.3 |   |

----

|                       |   | Year ended December 31 |   |
|----------------------------|--------|---------------------------------------|--------|
| (unaudited)                |   | 2010                                  |   |   | 2009 |   |
| Revenue ($CAD millions)    |   | $                                     | 2,527  |   |   | $ | 2,388 |   |
| Net income ($CAD millions) |   |                                  | 772    |   |   |   | 578 |   |
| Basic per unit             |   |                                  | 1.75   |   |   |   | 1.39 |   |
| Diluted per unit           |   | $                                     | 1.73   |   |   | $ | 1.39 |   |

|                               |   | Year ended December 31 |   |
|------------------------------------|--------|---------------------------------------|--------|
| (millions)                         |   | 2010                                  |   |   | 2009 |   |
| Balance, beginning and end of year |   | $                                     | 10     |   |   | $ | 10 |   |

----

----

| Net Proved Developed andProved Undeveloped Reserves (1) |   | Light andMedium Oil(mmbbl) |   |   | Heavy Oil(mmbbl) |   |   | Natural Gas (bcf) |   |   | Natural GasLiquids(mmbbl) |   |   | Barrels of OilEquivalent(mmboe) |   |
|---------------------------------------------------------------------------------------|--------|--------------------------------------|--------|--------|-----------------------|--------|--------|-----------------------------|--------|--------|--------------------------------|--------|--------|-------------------------------------------|--------|
| December 31, 2009                                                                     |   |                                 | 228    |   |                  |   | 49     |                        |   |   | 693                            |   |   |                                      | 16     |   |   |   | 408 |   |
| Extensions & Discoveries                                                          |   |                                 | 13     |   |                  |   | -      |                        |   |   | 38                             |   |   |                                      | 1      |   |   |   | 20 |   |
| Improved Recovery                                                                     |   |                                 | 8      |   |                  |   | 1      |                        |   |   | 10                             |   |   |                                      | -      |   |   |   | 12 |   |
| Technical Revisions                                                                   |   |                                 | 11     |   |                  |   | 3      |                        |   |   | 82                             |   |   |                                      | 3      |   |   |   | 30 |   |
| Acquisitions                                                                          |   |                                 | 7      |   |                  |   | 3      |                        |   |   | 19                             |   |   |                                      | 1      |   |   |   | 14 |   |
| Dispositions                                                                          |   |                                 | (15    | )      |                  |   | (2     | )                           |   |   | (35                            | )      |   |                                      | -      |   |   |   | (24 | ) |
| Production                                                                            |   |                                 | (21    | )      |                  |   | (6     | )                           |   |   | (122                           | )      |   |                                      | (3     | ) |   |   | (51 | ) |
| Change for the year                                                                   |   |                                 | 4      |   |                  |   | (2     | )                           |   |   | (8                             | )      |   |                                      | 1      |   |   |   | 2 |   |
| December 31, 2010                                                                     |   |                                 | 232    |   |                  |   | 47     |                        |   |   | 685                            |   |   |                                      | 17     |   |   |   | 410 |   |
| Developed                                                                             |   |                                 | 186    |   |                  |   | 47     |                        |   |   | 617                            |   |   |                                      | 15     |   |   |   | 351 |   |
| Undeveloped                                                                           |   |                                 | 46     |   |                  |   | 1      |                        |   |   | 69                             |   |   |                                      | 2      |   |   |   | 59 |   |
| Total (2)                                                                             |   |                                 | 232    |   |                  |   | 47     |                        |   |   | 685                            |   |   |                                      | 17     |   |   |   | 410 |   |

----

| Net Proved Developed andProved Undeveloped Reserves (1) |   | Light andMedium Oil(mmbbl) |   |   | Heavy Oil(mmbbl) |   |   | NaturalGas (bcf) |   |   | Natural GasLiquids(mmbbl) |   |   | Barrels of OilEquivalent(mmboe) |   |
|---------------------------------------------------------------------------------------|--------|--------------------------------------|--------|--------|-----------------------|--------|--------|-----------------------|--------|--------|--------------------------------|--------|--------|-------------------------------------------|--------|
| December 31, 2008                                                                     |   |                                 | 214    |   |                  |   | 39     |                  |   |   | 875                            |   |   |                                      | 18     |   |   |   | 416 |   |
| Extensions & Discoveries                                                          |   |                                 | 11     |   |                  |   | -      |                  |   |   | 16                             |   |   |                                      | -      |   |   |   | 14 |   |
| Improved Recovery                                                                     |   |                                 | 7      |   |                  |   | 2      |                  |   |   | 3                              |   |   |                                      | -      |   |   |   | 9 |   |
| Technical Revisions                                                                   |   |                                 | 15     |   |                  |   | 23     |                  |   |   | (34                            | )      |   |                                      | 1      |   |   |   | 33 |   |
| Acquisitions                                                                          |   |                                 | 3      |   |                  |   | -      |                  |   |   | 6                              |   |   |                                      | -      |   |   |   | 4 |   |
| Dispositions                                                                          |   |                                 | (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     |   |   |   | 408 |   |
| Developed                                                                             |   |                                 | 187    |   |                  |   | 47     |                  |   |   | 647                            |   |   |                                      | 15     |   |   |   | 356 |   |
| Undeveloped                                                                           |   |                                 | 42     |   |                  |   | 2      |                  |   |   | 47                             |   |   |                                      | 1      |   |   |   | 52 |   |
| Total (2)                                                                             |   |                                 | 228    |   |                  |   | 49     |                  |   |   | 693                            |   |   |                                      | 16     |   |   |   | 408 |   |

| (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. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| As at December 31,  ($CAD millions) |   | 2010   |    |   | 2009   |   |    | 2008   |   |
|-----------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Proved oil and gas properties                 |   | $      | 17,660  |   |   | $      | 17,536  |   |   | $ | 17,030 |   |
| Unproved oil and gas properties               |   |   | 395     |   |   |   | 393     |   |   |   | 490 |   |
| Total capitalized costs                       |   |   | 18,055  |   |   |   | 17,929  |   |   |   | 17,520 |   |
| Accumulated depletion and depreciation        |   |   | (14,265 | )      |   |   | (13,804 | )      |   |   | (13,212 | ) |
| Net capitalized costs                         |   | $      | 3,790   |   |   | $      | 4,125   |   |   | $ | 4,308 |   |

| For the years ended December 31,  ($CAD millions) |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|-------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Property acquisition (disposition) costs (1)                                              |   |   |   |   |   |   |   |   |   |
| Proved oil and gas properties                                                             |   | $      | (1,306 | )      |   | $      | (369   | )      |   | $ | (50 | ) |
| Unproved oil and gas properties                                                           |   |   | 102    |   |   |   | 19     |   |   |   | 128 |   |
| Exploration costs (2)                                                                     |   |   | 210    |   |   |   | 79     |   |   |   | 140 |   |
| Development costs (3)                                                                     |   |   | 881    |   |   |   | 546    |   |   |   | 780 |   |
| Capital expenditures                                                                      |   |   | (113   | )      |   |   | 275    |   |   |   | 998 |   |
| Corporate acquisitions                                                                    |   |   | 139    |   |   |   | 116    |   |   |   | 5,525 |   |
| Total expenditures                                                                        |   | $      | 26     |   |   | $      | 391    |   |   | $ | 6,523 |   |

| (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. |
|-----------------|---------------------------------------------------------|

----

| For the years ended December 31,  ($CAD millions) |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|-------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Oil and gas sales, net of royalties and commodity contracts                               |   | $      | 2,512  |   |   | $      | 2,154  |   |   | $ | 4,413 |   |
| Lease operating costs and capital taxes                                                   |   |   | (959   | )      |   |   | (979   | )      |   |   | (865 | ) |
| Transportation costs                                                                      |   |   | (33    | )      |   |   | (34    | )      |   |   | (34 | ) |
| Depletion, depreciation and accretion                                                     |   |   | (506   | )      |   |   | (634   | )      |   |   | (9,738 | ) |
| Income taxes (1)                                                                          |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Results of operations                                                                     |   | $      | 1,014  |   |   | $      | 507    |   |   | $ | (6,224 | ) |

| (1)   | Penn West is currently not cash taxable. |
|-----------------|------------------------------------------|

|  ($CAD millions)                                    |   | 2010   |    |   | 2009   |   |
|----------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Future cash inflows                                      |   | $      | 24,117  |   |   | $      | 19,726 |   |
| Future production costs                                  |   |   | (11,765 | )      |   |   | (11,090 | ) |
| Future development costs                                 |   |   | (1,306  | )      |   |   | (1,047 | ) |
| Undiscounted pre-tax cash flows                          |   |   | 11,046  |   |   |   | 7,589 |   |
| Future income taxes (1)                                  |   |   | (583    | )      |   |   | (22 | ) |
| Future net cash flows                                    |   |   | 10,463  |   |   |   | 7,567 |   |
| Less 10% annual discount factor                          |   |   | (4,382  | )      |   |   | (3,170 | ) |
| Standardized measure of discounted future net cash flows |   | $      | 6,081   |   |   | $      | 4,397 |   |

| (1)   | Penn West is currently not cash taxable. |
|-----------------|------------------------------------------|

----

| ($CAD millions)                                                           |   | 2010   |   |   | 2009   |   |
|---------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Estimated future net revenue at beginning of year                         |   | $      | 4,397  |   |   | $      | 3,770 |   |
| Oil and gas sales during period net of production costs and royalties (1) |   |   | (1,512 | )      |   |   | (1,708 | ) |
| Changes due to prices and royalties related to forecast production (2)    |   |   | 643    |   |   |   | 1,635 |   |
| Development costs during the period (3)                                   |   |   | 1,187  |   |   |   | 688 |   |
| Changes in forecast development costs (4)                                 |   |   | (1,108 | )      |   |   | (476 | ) |
| Changes resulting from extensions and improved recovery (5)               |   |   | 485    |   |   |   | 225 |   |
| Changes resulting from discoveries (5)                                    |   |   | -      |   |   |   | 4 |   |
| Changes resulting from acquisitions of reserves (5)                       |   |   | 208    |   |   |   | 47 |   |
| Changes resulting from dispositions of reserves (5)                       |   |   | (233   | )      |   |   | (166 | ) |
| Discount factor (6)                                                       |   |   | 440    |   |   |   | 377 |   |
| Net change in income tax (7)                                              |   |   | (115   | )      |   |   | (1 | ) |
| Changes resulting from technical reserves revision                        |   |   | 459    |   |   |   | 152 |   |
| All other changes (8)                                                     |   |   | 1,231  |   |   |   | (150 | ) |
| Estimated future net revenue at end of year                               |   | $      | 6,081  |   |   | $      | 4,397 |   |

| (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. At December 31, 2010, Penn West was a Trust that would become taxable in 2011. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----