**Exhibit 99.4**

**AUDITORS’ REPORT ON RECONCILIATION TOUNITED STATES GAAP**

**Tothe board of directors of Penn west energy trust**

On February 28, 2007, we reported on the consolidatedbalance sheets of Penn West Energy Trust as at December 31, 2006 and 2005and the consolidated statements of income and retained earnings and cash flowsfor the years then ended, which are included in the annual report on Form40-F.  In connection with our audits,conducted in accordance with Canadian generally accepted auditing standards, ofthe aforementioned consolidated financialstatements, we also have audited the related supplemental note entitled “Reconciliationof Canadian and United States Generally Accepted Accounting Principles”included in the Form 40-F.  Thissupplemental note is the responsibility of the Trust’s management.  Our responsibility is to express an opinionon this supplemental note based on our audits.

In our opinion, such supplemental note, whenconsidered in relation to the basic consolidated financial statements taken asa whole, presents fairly, in all material respects, the information set forththerein. 

Chartered Accountants

Calgary, CanadaFebruary 28, 2007 (except for note (a),which is dated March 26, 2007)

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**Reconciliation of Canadian andUnited States Generally Accepted Accounting Principles**

Canadian Generally Accepted Accounting Principles (“GAAP”)varies in certain respects from U.S. GAAP. As required by the United StatesSecurities and Exchange Commission, the effect of these differences in principleson Penn West Energy Trust’s (the “Trust”) consolidated financial statements isdescribed and quantified below:

The application of U.S. GAAP would have the followingeffects on reported net income:
| **Years ended December 31**                                                                           | ** ** | **2006** | ** ** | **2005** | ** ** |
|----------------------------------------------------------------------------------------------------------------------|------------|----------|------------|----------|------------|
|                                                                                                                 |       |     |       |     |       |
| Net income as  reported in the Consolidated Statements of Income - Canadian GAAP                                     |       | $        | 665.6      |     | $          | 577.2 |   |
| Adjustments                                                                                                          |       |     |       |     |       |
| Unit-based compensation (note (g))                                                                                   |       | (9.6     | )          | —   |       |
| Risk management activities (note (b))                                                                                |       | (11.9    | )          | 0.1      |       |
| Plan of arrangement costs (note (c))                                                                                 |       | —   |       | (36.3    | )          |
| Income tax effect of the above adjustments                                                                           |       | 3.6      |       | 3.4      |       |
| Net and Other  Comprehensive Income, as adjusted before cumulative effect of change in  accounting policy (note (d)) |       | 647.7    |       | 544.4    |       |
| Cumulative  effect of change in accounting policy, net of income taxes (note (g))                                    |       | (9.2     | )          | 0.0      |       |
| Net and Other  Comprehensive Income - U.S. GAAP, as adjusted                                                         |       | $        | 638.5      |     | $          | 544.4 |   |
|                                                                                                                 |       |     |       |     |       |
| Net income per  trust unit before cumulative effect of change in accounting policy                                   |       |     |       |     |       |
| Basic                                                                                                                |       | $        | 3.23       |     | $          | 3.35 |   |
| Diluted                                                                                                              |       | 3.20     |       | 3.28     |       |
|                                                                                                                 |       |     |       |     |       |
| Cumulative  effect of change in accounting policy                                                                    |       |     |       |     |       |
| Basic                                                                                                                |       | (0.05    | )          | —   |       |
| Diluted                                                                                                              |       | (0.05    | )          | —   |       |
|                                                                                                                 |       |     |       |     |       |
| Net Income per  trust unit                                                                                           |       |     |       |     |       |
| Basic                                                                                                                |       | 3.18     |       | 3.35     |       |
| Diluted                                                                                                              |       | $        | 3.15       |     | $          | 3.28 |   |
|                                                                                                                 |       |     |       |     |       |
| Weighted average  number of trust units outstanding (in millions)                                                    |       |     |       |     |       |
| Basic                                                                                                                |       | 200.8    |       | 162.6    |       |
| Diluted                                                                                                              |       | 202.6    |       | 165.9    |       |
|                                                                                                                 |       |     |       |     |       |
| Retained  earnings (deficit) - U.S. GAAP                                                                             |       |     |       |     |       |
| Balance, beginning of the period - U.S. GAAP                                                                         |       | $        | (3,723.8   | )        | $          | 1,400.8 |   |
| Net Income - U.S. GAAP                                                                                               |       | 638.5    |       | 544.4    |       |
| Change in redemption value of Trust units (note (e))                                                                 |       | 1,501.3  |       | (5,336.7 | )          |
| Dividends                                                                                                            |       | —   |       | (10.8    | )          |
| Distributions declared                                                                                               |       | (811.8   | )          | (321.5   | )          |
| Balance, end of  period - U.S. GAAP                                                                                  |       | $        | (2,395.8   | )        | $          | (3,723.8 | ) |

 

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The application of U.S. GAAP would have the followingeffects on the reported balance sheets:
| ** **                                             | ** ** | **Canadian** | ** **  | **U.S.**   | ** ** |
|--------------------------------------------------------|------------|--------------|-------------|------------|------------|
| **Year ended December 31, 2006**   | ** ** | **GAAP**     | ** **  | **GAAP**   | ** ** |
|                                                   |       |         |        |       |       |
| ASSETS                                                 |       |         |        |       |       |
| **Current**                                            |       |         |        |       |       |
| Accounts receivable                                    |       | $            | 268.7       |       | $          | 268.7 |   |
| Risk Management (note (b))                             |       | 54.0         |        | 54.0       |       |
| Other                                                  |       | 56.0         |        | 56.0       |       |
|                                                   |       | 378.7        |        | 378.7      |       |
| Property, plant and equipment (note (a))               |       | 7,039.0      |        | 7,039.0    |       |
| Goodwill                                               |       | 652.0        |        | 652.0      |       |
|                                                   | ** ** | **$**        | **8,069.7** | ** ** | **$**      | **8,069.7** | ** ** |
|                                                   |       |         |        |       |       |
| LIABILITIES AND  UNITHOLDERS’ EQUITY (DEFICIENCY) |       |         |        |       |       |
| **Current**                                            | ** ** | ** **   | ** **  | ** ** | ** ** |
| Accounts payable                                       |       | $            | 382.9       |       | $          | 382.9 |   |
| Taxes payable                                          |       | 1.2          |        | 1.2        |       |
| Distributions payable                                  |       | 80.6         |        | 80.6       |       |
| Deferred gain on financial instruments (note (b))      |       | —       |        | —     |       |
|                                                   |       | 464.7        |        | 464.7      |       |
| Bank loan                                              |       | 1,285.0      |        | 1,285.0    |       |
| Asset retirement obligations                           |       | 339.1        |        | 339.1      |       |
| Unit rights liability (note (g))                       |       | —       |        | 34.1       |       |
| Future income taxes                                    |       | 792.6        |        | 793.7      |       |
|                                                   |       | 2,416.7      |        | 2,451.9    |       |
| Total Liabilities                                      |       | 2,881.4      |        | 2,916.6    |       |
|                                                   |       |         |        |       |       |
| Unitholders’ mezzanine equity (note (e))          |       | —       |        | 7,548.9    |       |
|                                                   |       |         |        |       |       |
| **Unitholders’ Equity (Deficiency)**              | ** ** | ** **   | ** **  | ** ** | ** ** |
| Unitholders’ capital (note (e))                   |       | 3,712.4      |        | —     |       |
| Contributed Surplus (note (e))                         |       | 16.4         |        | —     |       |
| Retained earnings (deficit) (note (e))                 |       | 1,459.5      |        | (2,395.8   | )          |
|                                                   |       | 5,188.3      |        | (2,395.8   | )          |
|                                                   | ** ** | **$**        | **8,069.7** | ** ** | **$**      | **8,069.7** | ** ** |

 

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| ** **                                             | ** ** | **Canadian** | ** **  | **U.S.**   | ** ** |
|--------------------------------------------------------|------------|--------------|-------------|------------|------------|
| **Year ended December 31, 2005**   | ** ** | **GAAP**     | ** **  | **GAAP**   | ** ** |
|                                                   |       |         |        |       |       |
| ASSETS                                                 |       |         |        |       |       |
| **Current**                                            |       |         |        |       |       |
| Accounts receivable                                    |       | $            | 214.4       |       | $          | 214.4 |   |
| Risk Management (note (b))                             |       | 8.5          |        | 8.5        |       |
| Other                                                  |       | 29.0         |        | 29.0       |       |
|                                                   |       | 251.9        |        | 251.9      |       |
| Property, plant and equipment (note (a))               |       | 3,715.2      |        | 3,715.2    |       |
|                                                   | ** ** | **$**        | **3,967.1** | ** ** | **$**      | **3,967.1** | ** ** |
|                                                   |       |         |        |       |       |
| LIABILITIES AND  UNITHOLDERS’ EQUITY (DEFICIENCY) |       |         |        |       |       |
| **Current**                                            | ** ** | ** **   | ** **  | ** ** | ** ** |
| Accounts payable                                       |       | $            | 304.1       |       | $          | 304.1 |   |
| Taxes payable                                          |       | 11.8         |        | 11.8       |       |
| Distributions payable                                  |       | 50.6         |        | 50.6       |       |
| Deferred gain on financial instruments (note (b))      |       | 11.9         |        | 0.0        |       |
|                                                   |       | 378.4        |        | 366.5      |       |
| Bank loan                                              |       | 542.0        |        | 542.0      |       |
| Asset retirement obligations                           |       | 192.4        |        | 192.4      |       |
| Future income taxes                                    |       | 682.1        |        | 686.8      |       |
|                                                   |       | 1,416.5      |        | 1,421.2    |       |
| Total Liabilities                                      |       | 1,794.9      |        | 1,787.7    |       |
|                                                   |       |         |        |       |       |
| Unitholders’ mezzanine equity (note (e))          |       | —       |        | 5,903.2    |       |
|                                                   |       |         |        |       |       |
| **Unitholders’ Equity (Deficiency)**              | ** ** | ** **   | ** **  | ** ** | ** ** |
| Unitholders’ capital (note (e))                   |       | 561.0        |        | —     |       |
| Contributed Surplus (note (e))                         |       | 5.5          |        | —     |       |
| Retained earnings (deficit) (note (e))                 |       | 1,605.7      |        | (3,723.8   | )          |
|                                                   |       | 2,172.2      |        | (3,723.8   | )          |
|                                                   | ** ** | **$**        | **3,967.1** | ** ** | **$**      | **3,967.1** | ** ** |

 

The application of U.S. GAAP would have the followingeffects on reported cash flows (note f):
| ** **                            | ** ** | **Canadian** | ** ** | **U.S.**   | ** ** |
|---------------------------------------|------------|--------------|------------|------------|------------|
| **Years ended**                  | ** ** | **GAAP**     | ** ** | **GAAP**   | ** ** |
|                                  |       |         |       |       |       |
| December 31,  2006                    |       |         |       |       |       |
| Cash flows from  operating activities |       | $            | 1,106.3    |       | $          | 1,106.3 |   |
| Cash flows from  investing activities |       | (591.2       | )          | (591.2     | )          |
| Cash flows from  financing activities |       | (515.1       | )          | (515.1     | )          |
|                                  | ** ** | **$**        | **—** | ** ** | **$**      | **—** | ** ** |
|                                  |       |         |       |       |       |
| December 31,  2005                    |       |         |       |       |       |
| Cash flows from  operating activities |       | $            | 932.8      |       | $          | 750.2 |   |
| Cash flows from  investing activities |       | (519.9       | )          | (519.9     | )          |
| Cash flows from  financing activities |       | (412.9       | )          | (230.3     | )          |
|                                  | ** ** | **$**        | **—** | ** ** | **$**      | **—** | ** ** |

 

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**(a) Property, plant and equipment anddepletion and depreciation**

Under Canadian GAAP, an impairment exists when the netbook value of the petroleum and natural gas properties exceeds the sum of theundiscounted future cash flows from proved reserves calculated using forecastprices and costs, and the cost of unproven properties. If an impairment isdetermined to exist, the impairment is measured as the amount by which the netbook value of the petroleum and natural gas properties exceeds the sum of thepresent value of future discounted cash flows from proved plus probablereserves using forecast prices and costs, and the cost of unproved properties.

Under U.S. GAAP, the net book value of petroleum andnatural gas properties, net of deferred income taxes, is limited to the presentvalue of after-tax future net cash flows from proved reserves, discounted at 10percent and using prices and costs at the balance sheet date, plus the lower ofcost and fair value of unproved properties. The impairment test is performedannually on December 31 and, as elected by the Trust, recalculated sevenbusiness days prior to the filing date of the Trust’s consolidated financialstatements. If there is impairment indicated on December 31, which no longerexists at the time of the second test, no write down is required. At December31, 2006, an impairment of $443.2 million was indicated but upon there-performance of the test there was no indication of impairment as commodityprices increased from those applied at December 31, 2006. The application ofthe impairment test under U.S. GAAP did not result in a write-down of capitalizedcosts in either 2006 or 2005.

**(b) Derivative financial instruments**

Under Canadian GAAP, the disclosure of the fair valueof derivative financial instruments, which qualify for hedge accounting, isrequired with no recorded effect on assets, liabilities or net income. UnderU.S. GAAP, derivative financial instruments qualifying for hedge accountingmust be measured and presented on the consolidated balance sheet at fair valueas either an asset or liability with changes in the fair value of all cash flowhedges recognized in other comprehensive income until such time as theunderlying physical transaction occurs. Any change in the fair value ofderivative financial instruments, which no longer qualify for hedge accounting,is recognized in income of the period.

The hedging documentation requirements under CanadianGAAP differed in certain respects from those required under U.S. GAAP. As aresult, certain derivative financial instruments accounted for as hedges underCanadian GAAP did not qualify for hedge accounting when the Trust first appliedU.S. GAAP.

Effective July 1, 2005, the Trust elected todiscontinue designating derivative instruments as accounting hedges. As aresult of this change, a deferred gain on financial instruments of $16.7million, that represented the fair value of these financial contracts on July1, 2005, was recognized on the consolidated balance sheet for Canadian GAAPpurposes. This deferred gain was amortized to income over the remaining life ofthe financial contracts. For U.S. GAAP purposes, as the outstanding instrumentsat the time U.S. GAAP was adopted did not qualify for hedge accounting, all ofthe Trust’s financial contracts were measured at fair value, with correspondingchanges in fair values recognized as unrealized gains or losses in income ofthe period. The amortization of the deferred gain on financial instruments forCanadian GAAP purposes of $11.9 million ($8.3 million net of tax) was recordedas a reduction to U.S. GAAP income as this amount was previously recorded underU.S. GAAP.  In 2005, the change in fairvalue resulted in the recognition of a risk management activity gain of $0.1million ($0.1 million net of tax) reflected in the statement of income.

**(c) Plan of arrangement costs**

Effective May 31, 2005, Penn West Petroleum Ltd. wasreorganized into the Trust. Under Canadian GAAP, plan of arrangement coststotaling $36.3 million ($32.9 million net of tax) were charged directly toretained earnings in 2005. Under U.S. GAAP, these costs are treated as a chargeto income in the period.

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**(d) Other comprehensive income**

Comprehensive income is recognized and measured underU.S. GAAP pursuant to Statement of Financial Accounting Standard (“SFAS”) No.130, “Reporting Comprehensive Income”. This standard defines comprehensiveincome as all changes in equity other than those resulting from investments byowners and distributions to owners. Comprehensive income is comprised of twocomponents, net income and other comprehensive income (“OCI”). OCI refers toamounts that are recorded as an element of unitholders’ equity but are excludedfrom net income because these transactions or events were attributed to changesfrom non-owner sources. Comprehensive income was equivalent to net income in2006 and 2005.

**(e) Unitholders’ mezzanine equity**

U.S. GAAP requires that trust units, which areredeemable at the option of the unitholder, be valued at their redemptionamount and presented as temporary equity on the balance sheet. The redemptionvalue of the Penn West trust units is determined based on 95% of the marketvalue of the trust units at each balance sheet date. Under Canadian GAAP, alltrust units are classified as unitholders’ equity. As at December 31, 2006, theTrust reclassified $7,548.9 million (2005 - $5,893.1 million) as unitholders’mezzanine equity in accordance with U.S. GAAP.

Changes in unitholders’ mezzanine equity in excess oftrust units issued, net of redemptions, net income and cash distributions in aperiod are recognized as charges to the deficit. As a result, the Trustrecorded a reduction of $1,501.3 million (2005 – charge of $5,332.1 million) todeficit as at December 31, 2006.

**(f) Statements of cash flow**

Under U.S. GAAP, plan of arrangement costs incurred in2005 were treated as period costs. Accordingly, the associated cash outflows of$36.3 million are considered an operating activity pursuant to SFAS No. 95, “Statementof Cash Flows”. In addition, for U.S. GAAP purposes, cash outflows related tothe payment of income taxes are classified as operating activities. As such,the future income tax liability settled upon conversion to a trust on May 31,2005 of $146.3 million is considered an operating activity under U.S. GAAP.

**(g) Unit-based compensation**

On January 1, 2006, the Trust adopted SFAS 123R, “Share-BasedPayment” using the modified prospective method of application and adopted thefair value method of accounting for all grants under the rights plan. UnderSFAS 123R, rights granted under the rights plan are considered liability awardswhereas they were previously considered equity awards under SFAS 123.  As a result of the adoption of SFAS 123R onJanuary 1, 2006 the Trust recorded a trust unit rights liability of $14.7million, which represented the fair value of all outstanding unit rights onthat date, in proportion to the requisite service period rendered to that date.In addition, contributed surplus was reduced by $5.5 million representingpreviously recognized compensation cost for all outstanding unit rights forCanadian GAAP purposes, and an expense of $9.2 million was recorded as acumulative effect of a change in accounting policy.

The trust unit rights liability is calculated based onthe fair value of the grants, determined by the Binomial Lattice model at eachreporting date until the date of settlement. Compensation cost is recorded based on the change in fair value of therights during each reporting period. When rights are exercised, the proceeds plus the amount recorded as atrust unit rights liability are recorded to mezzanine equity.

A U.S. GAAP difference exists as rights granted underthe rights plan are considered equity awards for Canadian GAAP purposes.Unit-based compensation is based upon the fair value of rights issued,determined only on the grant date.  Thisinitial fair value is charged to income over the vesting period of the rightswith a corresponding increase in contributed surplus.  When rights are exercised, considerationreceived plus the fair value recorded in contributed surplus is transferred tounitholders’ equity.  For the year endedDecember 31, 2006, compensation expense calculated under U.S. GAAP was $9.6million higher than compensation expense calculated under Canadian GAAP.

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In 2005, unit rights that were redeemable at theoption of the holder met the criterion for classification as temporary equityunder U.S. GAAP. The redemption amount of the unit rights was recorded asmezzanine equity based upon the number of vested awards on the balance sheetdate.  The change in redemption amount ofthe Trust unit rights was reclassified to mezzanine equity; firstly fromcontributed surplus, and secondly from retained earnings (deficit) once thecontributed surplus balance was reduced to nil. For the year ended December 31,2005, contributed surplus was reduced by $5.5 million to nil, retained earnings(deficit) was reduced by $4.6 million and mezzanine equity was increased by$10.1 million under U.S. GAAP.

**(h) Netincome available to unitholders**

Net income available to unitholders under Emerging IssuesTask Force D-98 “Classification and Measurement of Redeemable Securities” was:
| ** **                                                        | ** ** | **2006**   | ** ** | **2005**   | ** ** |
|-------------------------------------------------------------------|------------|------------|------------|------------|------------|
| ** **                                                        | ** ** | ** ** | ** ** | ** ** | ** ** |
| Net and Other  Comprehensive Income – U.S. GAAP, as adjusted |       | $          | 638.5      |       | $          | 544.4 |   |
| Change in  redemption value of Trust units                        |       | 1,501.3    |       | (5,336.7   | )          |
| Net income  (loss) available to unitholders                       |       | $          | 2,139.8    |       | $          | (4,792.3 | ) |
|                                                              |       |       |       |       |       |
| Net income  (loss) available to unitholders per unit              |       |       |       |       |       |
| Basic                                                             |       | $          | 10.66      |       | $          | (29.47 | ) |
| Diluted                                                           |       | $          | 10.56      |       | $          | (29.47 | ) |

 

Changes in redemption value of Trust units are charged toretained earnings and are included in net income (loss) available tounitholders for purposes of calculating net income per unit.

**Recent U.S. accounting pronouncements**

In February 2006, the FASB issued SFAS No. 155, “Accountingfor Certain Hybrid Financial Instruments” (“SFAS No. 155”). This statementamends SFAS No. 133, “Accounting for Derivative Instruments and HedgingActivities”, and SFAS No. 140, “Accounting for Transfers and Servicing ofFinancial Assets and Extinguishments of Liabilities”. This Statement resolvesissues addressed in SFAS No. 133 Implementation Issue No. D1, “Application ofStatement 133 to Beneficial Interests in Securitized Financial Assets”. Thestatement a) permits fair value remeasurement for any hybrid financialinstrument that contains an embedded derivative that otherwise would requirebifurcation, b) clarifies which interest-only strips and principal-only stripsare not subject to the requirements of SFAS No. 133, c) establishes arequirement to evaluate interests in securitized financial assets to identify intereststhat are freestanding derivatives or that are hybrid financial instruments thatcontain an embedded derivative requiring bifurcation, d) clarifies thatconcentrations of credit risk in the form of subordination are not embeddedderivatives, and e) amends SFAS No. 140 to eliminate the prohibition on aqualifying special purpose entity from holding a derivative financialinstrument that pertains to a beneficial interest other than another derivativefinancial instrument. This statement is effective for all financial instrumentsacquired or issued after the beginning of an entity’s first fiscal year thatbegins after September 15, 2006 with early adoption permitted. The Trust iscurrently assessing the impact of SFAS No. 155.

In June 2006, the FASB issued Interpretation 48 “Accountingfor Uncertainty in Income Taxes” clarifying the accounting for uncertainty in income taxes recognized inan enterprise’s financial statements in accordance with FASB Statement No. 109,*Accounting for Income Taxes.* ThisInterpretation prescribes a recognition threshold and measurement attribute forthe financial statement recognition and measurement of a tax position taken orexpected to be taken in a tax return. It also provides guidance onde-recognition, classification, interest and penalties, accounting in interimperiods, disclosure, and transition. Interpretation 48 is effective for fiscal years beginning on/afterDecember 15, 2006.  The Trust iscurrently assessing the impact of Interpretation 48.

In September 2006, the FASB issuedSFAS 157 “Fair Value Measurements”.  TheStatement defines fair value, establishes a framework for measuring fair valuein generally accepted accounting principles and expands 

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disclosures about fair valuemeasurements. This Statement applies under other accounting pronouncements thatrequire or permit fair value measurements. The Statement is to be appliedprospectively and is effective for financial statements issued for fiscal yearsbeginning after November 15, 2007.  TheTrust is currently assessing the impact of SFAS 157.

In February 2007, the FASB issuedSFAS No. 159, “The Fair Value Option for Financial Assets and FinancialLiabilities—Including an Amendment of FASB Statement No. 115.”  Thispronouncement permits entities to use the fair value method to measure certainfinancial assets and liabilities by electing an irrevocable option to use thefair value method at specified election dates.  After election of theoption, subsequent changes in fair value would result in the recognition ofunrealized gains or losses as period costs during the period the changeoccurred.  SFAS No. 159 becomes effective as of the beginning of the firstfiscal year that begins after November 15, 2007, with early adoption permitted.However, entities may not retroactively apply the provisions of SFAS No. 159 tofiscal years preceding the date of adoption.  TheTrust is currently assessing the impact of SFAS 159.

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