**U.S. SECURITIES AND EXCHANGE COMMISSION****Washington, D.C. 20549**

 

**FORM 40-F**

 

**(Check One)**

 

| **o**  | **Registration statement pursuant  to Section 12 of the Securities Exchange Act of 1934**          |
|--------|---------------------------------------------------------------------------------------------------------|
|   |                                                                                                    |
|   | **or**                                                                                                  |
|   |                                                                                                    |
| **x**  | **Annual  report pursuant to section 13(a) or 15(d) of the Securities  Exchange Act of 1934** |

 

**For the fiscal year ended December 31, 2007**

 

**Commission file number 1-32895**

 

**PENN WEST ENERGY TRUST**

(Exact name of registrant as specified in its charter)

 

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

 

**Suite 2200, 425 1stStreet S.W. Calgary, Alberta, Canada T2P 3L8(403) 777-2500** (Address and TelephoneNumber of Registrant’s Principal Executive Offices)

 

**DL Services 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 or to be registered pursuant to Section 12(b) ofthe Act.

 

 

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

 

Securities registered or to be registered pursuant to Section 12(g) ofthe Act:  **None**

 

Securities for which there is a reporting obligationpursuant to Section 15(d) of the Act: **None**

 

For annual reports, indicate by check mark theinformation filed with this Form:

 

|   | x  Annual Information Form |   | x  Audited Annual Financial Statements |
|--------|----------------------------|--------|----------------------------------------|

 

Indicate the number of outstanding shares of each ofthe issuer’s classes of capital or common stock as of the close of the periodcovered by the annual report:  242,663,164

 

Indicate by check mark whether Penn West by filing theinformation contained in this Form is also thereby furnishing theinformation to the Commission pursuant to Rule 12g3-2(b) under theSecurities Exchange Act of 1934 (the “Exchange Act”). If “Yes” is marked,indicate the file number assigned to Penn West in connection with such rule.

 

|   |   | Yes o |   | No x |   |   |
|--------|--------|-------|--------|-----------|--------|--------|

 

Indicate by check mark whether Penn West: (1) hasfiled all reports required to be filed by Section 13 or 15(d) of the ExchangeAct during the preceding 12 months (or for such shorter period that Penn Westwas required to file such reports); and (2) has been subject to suchfiling requirements 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, 2007;

 

(b)                                 Management’sDiscussion and Analysis of Financial Condition and Results of Operations forthe fiscal year ended December 31, 2007;

 

(c)                                  ConsolidatedFinancial Statements for the fiscal year ended December 31, 2007; and

 

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

 

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**ADDITIONAL DISCLOSURE**

 

**Certificationsand Disclosure Regarding Controls and Procedures.**

 

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

 

(b)                                 DisclosureControls and Procedures. As of the end of Penn West Energy Trust’s (“PennWest”) fiscal year ended December 31, 2007, an evaluation of theeffectiveness of Penn West’s “disclosure controls and procedures” (as such termis defined in Rules 13a-15(e) and 15d-15(e) of the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”)) was carried out by themanagement of Penn West Petroleum Ltd., the administrator of Penn West, withthe participation of the Chief Executive Officer (“CEO”) and the Executive VicePresident and Chief Financial Officer (“CFO”) of Penn West Petroleum Ltd., whoalso perform such functions for Penn West. Based upon that evaluation, the CEOand CFO have concluded that as of the end of that fiscal year, Penn West’sdisclosure controls and procedures are effective to ensure that informationrequired to be disclosed by Penn West in reports that it files or submits underthe Exchange Act is (i) recorded, processed, summarized and reportedwithin the time periods specified in Securities and Exchange Commission rules andforms and (ii) accumulated and communicated to Penn West’s management,including its principal executive officer and principal financial officer, toallow timely decisions regarding required disclosure.

 

Itshould be noted that while the CEO and CFO believe that Penn West’s disclosurecontrols and procedures provide a reasonable level of assurance that they areeffective, 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 matter how well conceived or operated, canprovide only reasonable, not absolute, assurance that the objectives of thecontrol system are met.

 

(c)                                   Management’sAnnual Report on Internal Control Over Financial Reporting.

 

Management is responsiblefor establishing and maintaining adequate internal control over Penn West’sfinancial reporting. Penn West’s internal control system was designed toprovide reasonable assurance that all transactions are accurately recorded,that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles, andthat Penn West’s assets are safeguarded.

 

Management has assessedthe effectiveness of Penn West’s internal control over financial reporting asat December 31, 2007. In making its assessment, management used the Committee of Sponsoring Organizations of theTreadway Commission (“COSO”) framework in Internal Control – IntegratedFramework to evaluate the effectiveness of Penn West’s internal controlover financial 

 

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reporting. Based on thisassessment, management has concluded that Penn West’s internal control overfinancial reporting was effective as of December 31, 2007.

 

The effectiveness of PennWest’s internal control over financial reporting as at December 31, 2007has been audited by KPMG LLP, as stated in their Report of Independent Registered Public Accounting Firm on Penn West’sinternal control over financial reporting that accompanies Penn West’sConsolidated Financial Statements for the fiscal year ended December 31,2007, filed as Exhibit 99.3 to this Annual Report on Form 40-F.

 

(d)                                 AttestationReport of the Registered Public Accounting Firm. The required disclosure isincluded in the Report of IndependentRegistered Public Accounting Firm on Penn West’s internal control overfinancial reporting that accompanies Penn West’s Consolidated Financial Statementsfor the fiscal year ended December 31, 2007, filed as Exhibit 99.3 tothis Annual Report on Form 40-F.

 

(e)                                  Changesin Internal Control Over Financial Reporting. During the fiscal year ended December 31,2007, 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.

 

**NoticesPursuant to Regulation BTR.**

 

None.

 

**AuditCommittee Financial Expert.**

 

Penn West’s boardof directors has determined that James C. Smith, a member of Penn West’s auditcommittee, qualifies as an “audit committee financial expert” (as such term isdefined in Form 40-F). Mr. Smith is “independent” as that term indefined in the rules of the New York Stock Exchange.

 

**Code ofBusiness Conduct**.

 

Penn West hasadopted a Code of Ethics for Officers and Senior Financial Management. PennWest has also adopted a Code of Business Conduct and Ethics that applies to allemployees, officers and directors of Penn 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 of either of the Codes should be made bycontacting: investor relations by phone at (888) 770-2633 or by e-mail toinvestor_relations@pennwest.com.

 

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Since the adoptionof the Code of Ethics for Officers and Senior Financial Management and the Codeof Business Conduct and Ethics, respectively, there have not been anyamendments to, or waivers, including implicit waivers, from, any provision ofthe 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 2007 and 2006:

 

 
| **(CDN$)**          | ** ** | **2007** | ** ** | **2006** | ** ** |
|---------------------|------------|----------|------------|----------|------------|
| Audit Fees     |       | $        | 1,045,000  |     | $          | 610,000 |   |
| Audit-Related  Fees |       | 120,000  |       | 105,000  |       |
| Tax Fees            |       | 7,914    |       | 18,341   |       |
| All Other Fees      |       | —   |       | —   |       |
| Total               |       | $        | 1,172,914  |     | $          | 733,341 |   |

 

Audit Fees.Audit fees consist of fees for the integrated audit of Penn West’s annualfinancial statements or services that are normally provided in connection withstatutory and regulatory filings or engagements, reviews in connection withacquisitions and Sarbanes-Oxley Act related services.

 

Audit-Related Fees.Audit-related fees consist of fees for assurance and related services that arereasonably related to the performance of the audit or review of Penn West’sfinancial statements and are not reported as Audit Fees. During fiscal 2007 and2006, the services provided in this category included French translationservices.

 

Tax Fees.Tax fees consist of fees for tax compliance services, tax advice and taxplanning. During fiscal 2007 and 2006, the services provided in this categoryincluded assistance and advice in relation to the communication of thetaxability of distributions to unitholders and the review of corporate incometax 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 therepresentations and disclaimers relating thereto, must be pre-approved by theentire audit committee.

 

With respect to any engagements of Penn West’s external auditors fornon-audit services, Penn West must obtain the approval of the audit committeeor the Chairman of the audit committee prior to retaining the external auditorsto complete such engagement. If such pre-approval is provided by the Chairmanof the audit committee, the Chairman shall report to the audit committee on any

 

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non-audit service engagement pre-approved by him at the audit committee’sfirst scheduled meeting following such pre-approval.

 

If, after using its reasonable best efforts, Penn West is unable tocontact the Chairman of the audit committee on a timely basis to obtain thepre-approval contemplated by the preceding paragraph, Penn West may obtain therequired pre-approval from any other member of the audit committee, providedthat any such audit committee member shall report to the audit committee on anynon-audit service engagement pre-approved by him at the audit committee’s firstscheduled 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 wereapproved by Penn West’s audit committee pursuant to the *de minimus*exception provided by Section (c)(7)(i)(C) of Rule 2-01 ofRegulation 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.**

 
| ** **                                             | ** ** | ** **  | ** ** | **Payment due by period** | ** ** |
|--------------------------------------------------------|------------|-------------|------------|------------------------------------------|------------|
| **(CDN$ millions)  Contractual Obligations** | ** ** | **Total**   | ** ** | **Less than  1 Year**          | ** ** | **1 to 3  Years** | ** ** | **3 to 5  Years** | ** ** | **More  than 5  Years** | ** ** |
| Transportation                                         |       | 39.9        |       | 16.2                                     |       | 12.6 |   | 4.7 |   | 6.4 |   |
| Power  Infrastructure                                  |       | 30.6        |       | 6.2                                      |       | 8.4 |   | 8.4 |   | 7.6 |   |
| Drilling rigs                                          |       | 11.3        |       | 7.7                                      |       | 3.6 |   | — |   | — |   |
| Purchase  obligations (1)                              |       | 107.5       |       | 13.3                                     |       | 26.6 |   | 26.5 |   | 41.1 |   |
| Office lease                                           |       | 193.3       |       | 19.4                                     |       | 36.9 |   | 32.7 |   | 104.3 |   |
| Long term debt  (2)(3)                                 |       | 1,943.2     |       | —                                   |       | 1,485.4 |   | — |   | 457.8 |   |
| Asset retirement  obligations (4)                      |       | 1,526.0     |       | 41.4                                     |       | 82.8 |   | 82.8 |   | 1,319.0 |   |
| **Total**                                              | ** ** | **3,851.8** | ** ** | **104.2**                                | ** ** | **1,656.3** | ** ** | **155.1** | ** ** | **1,936.2** | ** ** |

 

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(1)   These amountsrepresent estimated commitments of $84.4 million for CO2 purchasesand $23.1 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)   Theseamounts represent the undiscounted future reclamation and abandonment coststhat are expected to be incurred over the life of the properties.

 

**Identification of the Audit Committee.**

 

Penn West has aseparately-designated standing audit committee established in accordance with Section 3(a)(58)(A) ofthe Exchange Act. The members of the audit committee are:  James C. Smith, James E. Allard, Shirley A.McClellan and Frank Potter.

 

**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 the rules ofthe New York Stock Exchange) meet without management participation. John A.Brussa, the Chairman of the Board, serves as the presiding director (the “PresidingDirector”) at such sessions. Penn West’s****Board of Directors is responsible fordetermining whether or not each director is independent. In making thisdetermination, the Board has adopted the definition of “independence” as setout in Section 1.4 of Multilateral Instrument 52-110 Audit Committees (“MI52-110”). In applying this definition, the Board considers all relationships ofthe directors with Penn West, including business, family and otherrelationships. Penn West’s Board of Directors also determines whether eachmember of Penn West’s Audit Committee is independent pursuant to Sections 1.4and 1.5 of MI 52-110 and Rule 10A-3 of the *SecuritiesExchange Act* of 1934. Penn West’s Board of Directors has not adoptedthe director independence standards contained in Section 303A.02 of theNYSE’s Listed Company Manual.

 

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**Membership on Multiple Audit Committees**

** **

Section 303A.07 of the NYSE’s Listed Company Manual requires that if anaudit committee member simultaneously serves on the audit committees of morethan three public companies, and if the listed company does not limit thenumber of audit committees on which its audit committee members may serve tothree or less, the Board of Directors of the listed company must determine thatsuch simultaneous service would not impair the ability of the audit committeemember to effectively serve on the listed company's audit committee, and mustpublicly disclose such determination. James C. Smith, a member of Penn West’s audit committee, serves on theaudit committees of more than three public companies.  Penn West’s Board of Directors has determinedthat such simultaneous service would not impair Mr. Smith’s ability toeffectively serve on Penn West’s audit committee.

 

Frank Potter, another member of Penn West’s auditcommittee, also serves on the audit committee of more than three publiccompanies.  Penn West’s Board ofDirectors has not yet made a determination as to whether or not suchsimultaneous service would impair the ability of Mr. Potter to effectivelyserve on Penn West’s audit committee. Penn West has disclosed the fact that such a determination has not yetbeen made in the NYSE Statement of Governance Differences that appears on PennWest’s website (www.pennwest.com).

 

**Communication with Non-Management Directors**

 

Unitholders may send communications to Penn West’snon-management directors by writing to George H. Brookman, Chairman of theGovernance Committee of the Board of Directors, care of Investor Relations –Penn West Energy Trust, 2200, 425 – First Street SW, Calgary, Alberta, T2P 3L8.Communications will be referred to the Presiding Director for appropriateaction. The status of all outstanding concerns addressed to the PresidingDirector will be reported to the board of directors as appropriate.

 

**Corporate Governance Guidelines**

 

In accordance with the rules of the New YorkStock Exchange, Penn West has adopted corporate governance guidelines, entitled“Governance Guidelines”, that are available for viewing on Penn West’s websiteat www.pennwest.comand are available in print to any unitholder who requests a copy of them. Requestsfor copies of the Governance Guidelines should be made by contacting:  investor relations by phone (888) 770-2633 orby e-mail to investor_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. Requests for copies of these documents should bemade by contacting: investor relations by phone (888) 770-2633 or by e-mail toinvestor_relations@pennwest.com.

 

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**UNDERTAKING AND CONSENT TO SERVICE OF PROCESS**

 

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

 

PennWest undertakes to make available, in person or by telephone, representativesto respond 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.**

 

PennWest has previously filed a Form F-X in connection with the class ofsecurities in relation to which the obligation to file this report arises.

 

Anychange to the name or address of the agent for service of process of Penn Westshall be communicated promptly to the Commission by an amendment to the Form F-Xreferencing the file number of the relevant registration statement.

 

**SIGNATURES**

 

Pursuant to the requirements of the Exchange Act, Penn West certifiesthat it meets all of the requirements for filing on Form 40-F and has dulycaused this annual report to be signed on its behalf by the undersigned,thereunto duly authorized, on March 26, 2008.

 
|   | **PENN  WEST ENERGY TRUST** |
|--------|-----------------------------|
|   | **By:**                     | **Penn  West Petroleum Ltd., its  administrator** |
|   |                        |
|   |                        |
|   | By:                         |      /s/  William E. Andrew |
|   | Name:                       | William E.  Andrew |
|   | Title:                      | Chief Executive  Officer |
|        |                             |  |  |  |

 

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**EXHIBIT INDEX**

 
| **Exhibit** | ** ** | **Description**                                                                                                                                                    |
|-------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |       |                                                                                                                                                               |
| 99.1        |       | Annual Information  Form for the fiscal year ended December 31, 2007                                                                                     |
|        |       |                                                                                                                                                               |
| 99.2        |       | Management’s Discussion  and Analysis of Financial Condition and Results of Operations for the fiscal  year ended December 31, 2007                      |
|        |       |                                                                                                                                                               |
| 99.3        |       | Consolidated Financial  Statements for the fiscal year ended December 31, 2007                                                                                |
|        |       |                                                                                                                                                               |
| 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.                                                                                                                          |
|        |       |                                                                                                                                                               |
| 99.11       |       | Consent of Sproule Associates Limited                                                                                                                              |

 

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