----

| /s/ William E. Andrew   | /s/ Murray R. Nunns | /s/ Todd H. Takeyasu             |
|-------------------------|---------------------|----------------------------------|
| William E. Andrew       | Murray R. Nunns     | Todd H. Takeyasu                 |
| Chief Executive Officer | President and COO   | Executive Vice President and CFO |

----

----

----

|                                                                                                                              |   | As at December 31 |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|
| (CAD millions)                                                                                                                    |   | 2009                   |   |   | 2008 |   |
|                                                                                                                              |   |                   |   |   |   |   |
| Assets                                                                                                                            |   |                   |   |   |   |   |
| Current                                                                                                                           |   |                   |   |   |   |   |
| Accounts receivable (note 3)                                                                                                      |   | $                      | 371    |   |   | $ | 386 |   |
| Risk management (note 8)                                                                                                          |   |                   | -      |   |   |   | 448 |   |
| Future income taxes (note 10)                                                                                                     |   |                   | 37     |   |   |   | - |   |
| Other (note 3)                                                                                                                    |   |                   | 101    |   |   |   | 106 |   |
|                                                                                                                              |   |                   | 509    |   |   |   | 940 |   |
| Property, plant and equipment (note 4)                                                                                            |   |                   | 11,347 |   |   |   | 12,452 |   |
| Goodwill (note 5)                                                                                                                 |   |                   | 2,020  |   |   |   | 2,020 |   |
|                                                                                                                              |   |                   | 13,367 |   |   |   | 14,472 |   |
|                                                                                                                              |   | $                      | 13,876 |   |   | $ | 15,412 |   |
|                                                                                                                              |   |                   |   |   |   |   |   |   |
|                                                                                                                              |   |                   |   |   |   |   |   |   |
| Liabilities and unitholders’ equity                                                                                         |   |                   |   |   |   |   |   |   |
| Current                                                                                                                           |   |                   |   |   |   |   |   |   |
| Accounts payable and accrued liabilities (note 3)                                                                                 |   | $                      | 515    |   |   | $ | 630 |   |
| Distributions payable                                                                                                             |   |                   | 63     |   |   |   | 132 |   |
| Convertible debentures (note 7)                                                                                                   |   |                   | 18     |   |   |   | 7 |   |
| Future income taxes (note 10)                                                                                                     |   |                   | -      |   |   |   | 132 |   |
| Risk management (note 8)                                                                                                          |   |                   | 130    |   |   |   | - |   |
|                                                                                                                              |   |                   | 726    |   |   |   | 901 |   |
| Long-term debt (note 6)                                                                                                           |   |                   | 3,219  |   |   |   | 3,854 |   |
| Convertible debentures (note 7)                                                                                                   |   |                   | 255    |   |   |   | 289 |   |
| Risk management (note 8)                                                                                                          |   |                   | 21     |   |   |   | 6 |   |
| Asset retirement obligations (note 9)                                                                                             |   |                   | 568    |   |   |   | 614 |   |
| Future income taxes (note 10)                                                                                                     |   |                   | 1,169  |   |   |   | 1,368 |   |
|                                                                                                                              |   |                   | 5,958  |   |   |   | 7,032 |   |
| Unitholders’ equity                                                                                                         |   |                   |   |   |   |   |   |   |
| Unitholders’ capital (note 11)  (Units outstanding  2009 – 421,638,737, 2008 – 386,504,586) |   |                   | 8,451  |   |   |   | 7,976 |   |
| Contributed surplus (note 11)                                                                                                     |   |                   | 123    |   |   |   | 75 |   |
| Retained earnings (deficit)                                                                                                       |   |                   | (656   | ) |   |   | 329 |   |
|                                                                                                                              |   |                   | 7,918  |   |   |   | 8,380 |   |
|                                                                                                                              |   | $                      | 13,876 |   |   | $ | 15,412 |   |

| /s/ John A. Brussa | /s/ James C. Smith |
|--------------------|--------------------|
| John A. Brussa     | James C. Smith     |
| Chairman           | Director           |

----

|                                            |   | Years ended December 31 |   |
|-------------------------------------------------|--------|------------------------------|--------|
| (CAD millions, except per unit amounts)         |   | 2009                         |   |   | 2008 |   |
|                                            |   |                         |   |   |   |   |
| Revenues                                        |   |                         |   |   |   |   |
| Oil and natural gas                             |   | $                            | 2,859  |   |   | $ | 4,947 |   |
| Royalties                                       |   |                         | (495   | ) |   |   | (898 | ) |
|                                            |   |                         | 2,364  |   |   |   | 4,049 |   |
|                                            |   |                         |   |   |   |   |   |   |
| Risk management gain (loss) (note 8)            |   |                         |   |   |   |   |   |   |
| Realized                                        |   |                         | 344    |   |   |   | (296 | ) |
| Unrealized                                      |   |                         | (554   | ) |   |   | 660 |   |
|                                            |   |                         | 2,154  |   |   |   | 4,413 |   |
| Expenses                                        |   |                         |   |   |   |   |   |   |
| Operating (note 12)                             |   |                         | 979    |   |   |   | 865 |   |
| Transportation                                  |   |                         | 34     |   |   |   | 34 |   |
| General and administrative (note 12)            |   |                         | 168    |   |   |   | 158 |   |
| Financing (notes 6 and 7)                       |   |                         | 161    |   |   |   | 204 |   |
| Depletion, depreciation and accretion           |   |                         | 1,556  |   |   |   | 1,594 |   |
| Unrealized risk management (gain) loss (note 8) |   |                         | 39     |   |   |   | (1 | ) |
| Unrealized foreign exchange (gain) loss         |   |                         | (186   | ) |   |   | 203 |   |
| Gain on currency contracts (note 8)             |   |                         | (75    | ) |   |   | - |   |
|                                            |   |                         | 2,676  |   |   |   | 3,057 |   |
| Income (loss) before taxes                      |   |                         | (522   | ) |   |   | 1,356 |   |
|                                            |   |                         |   |   |   |   |   |   |
| Taxes                                           |   |                         |   |   |   |   |   |   |
| Future income tax (recovery) expense (note 10)  |   |                         | (378   | ) |   |   | 135 |   |
|                                            |   |                         |   |   |   |   |   |   |
| Net and comprehensive income (loss)             |   | $                            | (144   | ) |   | $ | 1,221 |   |
|                                            |   |                         |   |   |   |   |   |   |
| Retained earnings, beginning of year            |   | $                            | 329    |   |   | $ | 658 |   |
| Distributions declared                          |   |                         | (841   | ) |   |   | (1,550 | ) |
| Retained earnings (deficit), end of year        |   | $                            | (656   | ) |   | $ | 329 |   |
|                                            |   |                         |   |   |   |   |   |   |
| Net income (loss) per unit (note 14)            |   |                         |   |   |   |   |   |   |
| Basic                                           |   | $                            | (0.35  | ) |   | $ | 3.25 |   |
| Diluted                                         |   | $                            | (0.35  | ) |   | $ | 3.22 |   |
| Weighted average units outstanding (millions)   |   |                         |   |   |   |   |   |   |
| Basic                                           |   |                         | 412.9  |   |   |   | 375.6 |   |
| Diluted                                         |   |                         | 412.9  |   |   |   | 382.9 |   |

----

|                                            |   | Years ended December 31 |   |
|-------------------------------------------------|--------|------------------------------|--------|
| (CAD millions)                                  |   | 2009                         |   |   | 2008 |   |
|                                            |   |                         |   |   |   |   |
| Operating activities                            |   |                         |   |   |   |   |
| Net income (loss)                               |   | $                            | (144   | ) |   | $ | 1,221 |   |
| Depletion, depreciation and accretion (note 4)  |   |                         | 1,556  |   |   |   | 1,594 |   |
| Future income tax (recovery) expense (note 10)  |   |                         | (378   | ) |   |   | 135 |   |
| Unit-based compensation (note 12)               |   |                         | 52     |   |   |   | 45 |   |
| Unrealized risk management (gain) loss (note 8) |   |                         | 593    |   |   |   | (661 | ) |
| Unrealized foreign exchange (gain) loss         |   |                         | (186   | ) |   |   | 203 |   |
| Asset retirement expenditures                   |   |                         | (65    | ) |   |   | (85 | ) |
| Change in non-cash working capital (note 16)    |   |                         | (27    | ) |   |   | (196 | ) |
|                                            |   |                         | 1,401  |   |   |   | 2,256 |   |
|                                            |   |                         |   |   |   |   |   |   |
| Investing activities                            |   |                         |   |   |   |   |   |   |
| Additions to property, plant and equipment      |   |                         | (688   | ) |   |   | (1,095 | ) |
| Acquisitions of property, plant and equipment   |   |                         | (32    | ) |   |   | (17 | ) |
| Dispositions of property, plant and equipment   |   |                         | 401    |   |   |   | 67 |   |
| Acquisition costs                               |   |                         | -      |   |   |   | (29 | ) |
| Change in non-cash working capital (note 16)    |   |                         | (79    | ) |   |   | 25 |   |
|                                            |   |                         | (398   | ) |   |   | (1,049 | ) |
|                                            |   |                         |   |   |   |   |   |   |
| Financing activities                            |   |                         |   |   |   |   |   |   |
| Increase (decrease) in bank loan                |   |                         | (687   | ) |   |   | 1,089 |   |
| Issue of equity                                 |   |                         | 280    |   |   |   | 59 |   |
| Distributions paid                              |   |                         | (799   | ) |   |   | (1,313 | ) |
| Proceeds from issuance of notes (note 6)        |   |                         | 238    |   |   |   | 619 |   |
| Redemption / maturity of convertible debentures |   |                         | (4     | ) |   |   | (61 | ) |
| Repayment of acquired facilities                |   |                         | (31    | ) |   |   | (1,600 | ) |
|                                            |   |                         | (1,003 | ) |   |   | (1,207 | ) |
|                                            |   |                         |   |   |   |   |   |   |
| Change in cash                                  |   |                         | -      |   |   |   | - |   |
| Cash, beginning of year                         |   |                         | -      |   |   |   | - |   |
| Cash, end of year                               |   | $                            | -      |   |   | $ | - |   |
|                                            |   |                         |   |   |   |   |   |   |
| Interest paid                                   |   | $                            | 147    |   |   | $ | 200 |   |
| Income taxes paid (received)                    |   | $                            | (3     | ) |   | $ | 5 |   |

----

----

|   | i) | Capitalized costs |
|--------|----|-------------------|

|   | ii) | Depletion and depreciation |
|--------|-----|----------------------------|

|   | iii) | Ceiling test |
|--------|------|--------------|

|   | iv) | Asset retirement obligations |
|--------|-----|------------------------------|

----

----

----

|   | · | the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract, |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | if the embedded derivative separated meets the definition of a derivative, |
|--------|--------|----------------------------------------------------------------------------|

|   | · | the hybrid contract is not measured at fair value or designated as held for trading. |
|--------|--------|--------------------------------------------------------------------------------------|

----

|                                                   |   | As at December 31 |   |
|--------------------------------------------------------|--------|------------------------|--------|
|                                                   |   | 2009                   |   |   | 2008 |   |
| Components of accounts receivable                      |   |                   |   |   |   |   |
| Trade                                                  |   | $                      | 93     |   |   | $ | 123 |   |
| Accruals                                               |   |                   | 274    |   |   |   | 259 |   |
| Other                                                  |   |                   | 4      |   |   |   | 4 |   |
|                                                   |   | $                      | 371    |   |   | $ | 386 |   |
| Components of other assets                             |   |                   |   |   |   |   |   |   |
| Prepaid expenses                                       |   | $                      | 70     |   |   | $ | 82 |   |
| Inventory                                              |   |                   | 31     |   |   |   | 24 |   |
|                                                   |   | $                      | 101    |   |   | $ | 106 |   |
| Components of accounts payable and accrued liabilities |   |                   |   |   |   |   |   |   |
| Accounts payable                                       |   | $                      | 149    |   |   | $ | 261 |   |
| Royalty payable                                        |   |                   | 77     |   |   |   | 90 |   |
| Capital accrual                                        |   |                   | 130    |   |   |   | 208 |   |
| Operating accrual                                      |   |                   | 82     |   |   |   | 11 |   |
| Other                                                  |   |                   | 77     |   |   |   | 60 |   |
|                                                   |   | $                      | 515    |   |   | $ | 630 |   |

----

|                                                                          |   |   | As at December 31 |   |
|-------------------------------------------------------------------------------|--------|--------|------------------------|--------|
|                                                                          |   |   | 2009                   |   |   |   | 2008 |   |
| Oil and natural gas properties, including production and processing equipment |   | $      | 17,929                 |   |   | $ | 17,520 |   |
| Accumulated depletion and depreciation                                        |   |   | (6,582                 | )      |   |   | (5,068 | ) |
| Net book value                                                                |   | $      | 11,347                 |   |   | $ | 12,452 |   |

|                              |   |   | WTI ($US/ bbl) |   |   | AECO ($CAD/mcf) |   |   | Exchange rate ($US equals $1 CAD) |   |
|-----------------------------------|--------|--------|----------------|--------|--------|-----------------|--------|--------|-----------------------------------|--------|
| 2010                              |   |   | $              | 79.58  |   |            | $      | 5.66   |                              |   |   | 0.94 |   |
| 2011                              |   |   |           | 83.73  |   |            |   | 6.50   |                              |   |   | 0.94 |   |
| 2012                              |   |   |           | 86.45  |   |            |   | 6.67   |                              |   |   | 0.94 |   |
| 2013                              |   |   |           | 89.60  |   |            |   | 7.09   |                              |   |   | 0.94 |   |
| 2014 – 2019                 |   |   | $              | 96.73  |   |            | $      | 8.12   |                              |   |   | 0.94 |   |
| Thereafter (inflation percentage) |   |   |           | 2      | %      |            |   | 2      | %                                 |   |   | - |   |

|                       |   |   | Year ended December 31 |   |
|----------------------------|--------|--------|-----------------------------|--------|
|                       |   |   | 2009                        |   |   |   | 2008 |   |
| Balance, beginning of year |   | $      | 2,020                       |   |   | $ | 652 |   |
| Acquisitions               |   |   | -                           |   |   |   | 1,368 |   |
| Balance, end of year       |   | $      | 2,020                       |   |   | $ | 2,020 |   |

----

|                                                |   | As at December 31 |   |
|-----------------------------------------------------|--------|------------------------|--------|
|                                                |   | 2009                   |   |   | 2008 |   |
| Bankers’ acceptances and prime rate loans     |   | $                      | 1,874  |   |   | $ | 2,561 |   |
|                                                |   |                   |   |   |   |   |   |   |
| U.S. Senior unsecured notes – 2007 Notes      |   |                   |   |   |   |   |   |   |
| 5.68%, US$160 million, maturing May 31, 2015        |   |                   | 168    |   |   |   | 195 |   |
| 5.80%, US$155 million, maturing May 31, 2017        |   |                   | 163    |   |   |   | 189 |   |
| 5.90%, US$140 million, maturing May 31, 2019        |   |                   | 147    |   |   |   | 170 |   |
| 6.05%, US$20 million, maturing May 31, 2022         |   |                   | 21     |   |   |   | 24 |   |
|                                                |   |                   | 499    |   |   |   | 578 |   |
| Senior unsecured notes – 2008 Notes           |   |                   |   |   |   |   |   |   |
| 6.12%, US$153 million, maturing May 29, 2016        |   |                   | 160    |   |   |   | 186 |   |
| 6.16%, CAD$30 million, maturing May 29, 2018        |   |                   | 30     |   |   |   | 30 |   |
| 6.30%, US$278 million, maturing May 29, 2018        |   |                   | 292    |   |   |   | 339 |   |
| 6.40%, US$49 million, maturing May 29, 2020         |   |                   | 52     |   |   |   | 59 |   |
|                                                |   |                   | 534    |   |   |   | 614 |   |
| UK Senior unsecured notes – UK Notes          |   |                   |   |   |   |   |   |   |
| 6.95%, £57 million, maturing July 31, 2018 (1) |   |                   | 97     |   |   |   | 101 |   |
|                                                |   |                   |   |   |   |   |   |   |
| Senior unsecured notes – 2009 Notes           |   |                   |   |   |   |   |   |   |
| 8.29%, US$50 million, maturing May 5, 2014          |   |                   | 52     |   |   |   | - |   |
| 8.89%, US$35 million, maturing May 5, 2016          |   |                   | 36     |   |   |   | - |   |
| 9.32%, US$34 million, maturing May 5, 2019          |   |                   | 36     |   |   |   | - |   |
| 8.89%, US$35 million, maturing May 5, 2019 (2)      |   |                   | 37     |   |   |   | - |   |
| 9.15%, £20 million, maturing May 5, 2019 (3)   |   |                   | 34     |   |   |   | - |   |
| 9.22%, €10 million, maturing May 5, 2019 (4)  |   |                   | 15     |   |   |   | - |   |
| 7.58%, CAD$5 million, maturing May 5, 2014          |   |                   | 5      |   |   |   | - |   |
|                                                |   |                   | 215    |   |   |   | - |   |
|                                                |   |                   |   |   |   |   |   |   |
| Total long-term debt                                |   | $                      | 3,219  |   |   | $ | 3,854 |   |

| (1) | These notes bear interest at 7.78 percent in Pounds Sterling, however, contracts were entered which fixed the interest rate at 6.95 percent in Canadian dollars. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | This portion of the 2009 Notes has equal repayments, beginning in 2013, over the remaining seven years. |
|-----|---------------------------------------------------------------------------------------------------------|

| (3) | These notes bear interest at 9.49 percent in Pounds Sterling, however, contracts were entered into which fixed the interest rate at 9.15 percent in Canadian dollars. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | These notes bear interest at 9.52 percent in Euros, however, contracts were entered into which fixed the interest rate at 9.22 percent in Canadian dollars. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|       |   | As at December 31 |   |
|------------|--------|------------------------|--------|
|       |   | 2009                   |   |   | 2008 |   |
| 2007 Notes |   | $                      | 508    |   |   | $ | 495 |   |
| 2008 Notes |   |                   | 558    |   |   |   | 536 |   |
| UK Notes   |   |                   | 99     |   |   |   | 92 |   |
| 2009 Notes |   |                   | 247    |   |   |   | - |   |
| Total      |   | $                      | 1,412  |   |   | $ | 1,123 |   |

|  Description of security |   | Symbol   |   | Maturity date |   | Conversion price(per unit) |   |   | Redemption prices(per $1,000 face value) |
|-------------------------------|--------|----------|--------|---------------|--------|----------------------------|--------|--------|------------------------------------------|
| 8.0% Convertible (1)          |   | PWT.DB.C |   | June 30, 2010 |   | $                          | 82.14  |   |                                     | $1,025 July 1, 2009 to maturity |
| 6.5% Convertible extendible   |   | PWT.DB.D |   | July 31, 2010 |   | $                          | 36.82  |   |                                     | $1,025 July 31, 2009 to maturity |
| 7.2% Convertible              |   | PWT.DB.E |   | May 31, 2011  |   | $                          | 75.00  |   |                                     | $1,050 May 31, 2009 – May 30, 2010 |
|                          |   |     |   |          |   |                       |   |   |                                     | $1,025 May 31, 2010 to maturity |
| 6.5% Convertible extendible   |   | PWT.DB.F |   | Dec. 31, 2011 |   | $                          | 51.55  |   |                                     | $1,050 Dec. 31, 2009 – Dec. 30, 2010 |
|                          |   |     |   |          |   |                       |   |   |                                     | $1,025 Dec. 31, 2010 to maturity |

----

|                   |   | PWT.DB.A |   |   | PWT.DB.B |   |   | PWT.DB.C |   |   | PWT.DB.D |   |   | PWT.DB.E |   |   | PWT.DB.F |   |   |   |   |
|------------------------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|--------|--------|
|                   |   | 9.4%     |   |   | 8.0%     |   |   | 8.0%     |   |   | 6.5%     |   |   | 7.2%     |   |   | 6.5%     |   |   | Total  |   |
| Balance, Dec. 31, 2007 |   | $        | -      |   |     | $      | -      |     |   | $      | -        |   |   | $        | -      |   |     | $      | -      |   |   | $ | - |   |   | $ | - |   |
| Acquired               |   |     | 6      |   |     |   | 8      |     |   |   | 49       |   |   |     | 18     |   |     |   | 50     |   |   |   | 229 |   |   |   | 360 |   |
| Converted              |   |     | (1     | )      |     |   | (1     | )        |   |   | (1       | )      |   |     | -      |   |     |   | -      |   |   |   | - |   |   |   | (3 | ) |
| Redeemed               |   |     | -      |   |     |   | -      |     |   |   | (32      | )      |   |     | -      |   |     |   | (24    | )      |   |   | - |   |   |   | (56 | ) |
| Matured                |   |     | (5     | )      |     |   | -      |     |   |   | -        |   |   |     | -      |   |     |   | -      |   |   |   | - |   |   |   | (5 | ) |
| Balance, Dec. 31, 2008 |   |     | -      |   |     |   | 7      |     |   |   | 16       |   |   |     | 18     |   |     |   | 26     |   |   |   | 229 |   |   |   | 296 |   |
| Redeemed               |   |     | -      |   |     |   | -      |     |   |   | (16      | )      |   |     | -      |   |     |   | -      |   |   |   | - |   |   |   | (16 | ) |
| Matured                |   |     | -      |   |     |   | (7     | )        |   |   | -        |   |   |     | -      |   |     |   | -      |   |   |   | - |   |   |   | (7 | ) |
| Balance, Dec 31, 2009  |   | $        | -      |   |     | $      | -      |     |   | $      | -        |   |   | $        | 18     |   |     | $      | 26     |   |   | $ | 229 |   |   | $ | 273 |   |

----

----

|                                              |   | Year ended December 31 |   |
|---------------------------------------------------|--------|-----------------------------|--------|
| Risk management                                   |   | 2009                        |   |   | 2008 |   |
| Balance, beginning of year                        |   | $                           | 442    |   |   | $ | (148 | ) |
| Liabilities acquired in year                      |   |                        | -      |   |   |   | (71 | ) |
| Unrealized gain (loss) on financial instruments:  |   |                        |   |   |   |   |   |   |
| Commodity collars                                 |   |                        | (554   | ) |   |   | 660 |   |
| Electricity swaps                                 |   |                        | (25    | ) |   |   | 3 |   |
| Interest rate swaps                               |   |                        | 32     |   |   |   | (43 | ) |
| Foreign exchange forwards                         |   |                        | (51    | ) |   |   | 63 |   |
| Cross currency swaps                              |   |                        | 5      |   |   |   | (22 | ) |
| Fair value, end of year                           |   | $                           | (151   | ) |   | $ | 442 |   |
|                                              |   |                        |   |   |   |   |   |   |
| Total fair value consists of the following:       |   |                        |   |   |   |   |   |   |
| Fair value, end of year – current portion   |   | $                           | (130   | ) |   | $ | 448 |   |
| Fair value, end of year – long-term portion |   |                        | (21    | ) |   |   | (6 | ) |
| Total fair value, end of year                     |   | $                           | (151   | ) |   | $ | 442 |   |

|                                               |   | Year ended December 31 |   |
|----------------------------------------------------|--------|------------------------|--------|
| Risk management                                    |   | 2009                   |   |   | 2008 |   |
| Balance, beginning of year                         |   | $                      | 442    |   |   | $ | (148 | ) |
| Liabilities acquired in year                       |   |                   | -      |   |   |   | (71 | ) |
| Realized (gain) loss – commodity contracts   |   |                   | (344   | ) |   |   | 296 |   |
| Unrealized gain (loss) – commodity contracts |   |                   | (210   | ) |   |   | 364 |   |
| Realized (gain) loss – other                 |   |                   | 37     |   |   |   | (6 | ) |
| Unrealized gain (loss) – other               |   |                   | (76    | ) |   |   | 7 |   |
| Total fair value, end of year                      |   | $                      | (151   | ) |   | $ | 442 |   |

----

|                      |   | Notionalvolume |      |   | Remainingterm               |   |   | Pricing                |              |                  | Fair value |   |
|---------------------------|--------|----------------|-----------|--------|-----------------------------|--------|--------|------------------------|-------------------|-----------------------|------------|--------|
| Crude oil                 |   |           |      |   |                        |   |   |                   |              |                  |       |   |
| WTI Collars               |   | 35,000 bbls/d  |      |   | Jan/10 – Dec/10       |   |   | US$60.11 to $75.72/bbl |              |                  | $          | (139   | ) |
| Natural gas               |   |           |      |   |                        |   |   |                   |              |                  |       |   |   |
| AECO Collars (1)          |   | 63,000 GJ/d    |      |   | Jan/10 – Oct/10       |   |   |                   | $6.50 to $9.50/GJ |                  |       |   | 29 |   |
| Electricity swaps         |   |           |      |   |                        |   |   |                   |              |                  |       |   |   |   |
| Alberta Power Pool Swaps  |   | 50 MW          |      |   | Jan/10 – Dec/10       |   |   | $77.82/MWh             |              |                  |       | (10    | ) |
| Alberta Power Pool Swaps  |   | 25 MW          |      |   | Jan/10 – Dec/11       |   |   | $66.70/MWh             |              |                  |       | (6     | ) |
| Alberta Power Pool Swaps  |   | 50 MW          |      |   | Jan/11 – Dec/11       |   |   | $66.23/MWh             |              |                  |       | (7     | ) |
| Interest rate swaps       |   |           |      |   |                        |   |   |                   |              |                  |       |   |   |   |
|                      |   | $50            |      |   | Jan/10 – June/10 |   |   |                   | 3.68              | %                     |       |   | (1 | ) |
|                      |   | $250           |      |   | Jan/10 – Nov/10       |   |   |                   | 2.27              | %                     |       |   | (4 | ) |
|                      |   | $500           |      |   | Jan/10 – Dec/11       |   |   |                   | 1.61              | %                     |       |   | (2 | ) |
|                      |   | $600           |      |   | Jan/10 – Jan/14       |   |   |                   | 2.71              | %                     |       |   | (5 | ) |
|                      |   | $50            |      |   | June/10 – Jan/14      |   |   |                   | 1.94              | %                     |       |   | 1 |   |
| Foreign exchange forwards |   |           |      |   |                        |   |   |                   |              |                  |       |   |
| 8-year term               |   | US$80          |      |   |                        | 2015   |   |                   | 1.01027 CAD/USD   |                  |       |   | 3 |   |
| 10-year term              |   | US$80          |      |   |                        | 2017   |   |                   | 1.00016 CAD/USD   |                  |       |   | 3 |   |
| 12-year term              |   | US$70          |      |   |                        | 2019   |   |                   | 0.99124 CAD/USD   |                  |       |   | 3 |   |
| 15-year term              |   | US$20          |      |   |                        | 2022   |   |                   | 0.98740 CAD/USD   |                  |       |   | 1 |   |
| Cross currency            |   |           |      |   |                        |   |   |                   |              |                  |       |   |   |
| 10-year term              |   |           | £57  |   |                        |   | 2018   |                   |              | 2.0075 CAD/GBP, 6.95% |       |   |   | (15 | ) |
| 10-year term              |   |           | £20  |   |                        |   | 2019   |                   |              | 1.8051 CAD/GBP, 9.15% |       |   |   | (2 | ) |
| 10-year term              |   |           | €10 |   |                        |   | 2019   |                   |              | 1.5870 CAD/EUR, 9.22% |       |   |   | - |   |
|                      |   |           |      |   |                        |   |   |                   |              |                  |       |   |   |   |   |   |
| Total                     |   |           |      |   |                        |   |   |                   |              |                  |       |   |   | $ | (151 | ) |

----

|                                                |   | Year ended December 31 |   |
|-----------------------------------------------------|--------|-----------------------------|--------|
|                                                |   | 2009                        |   |   | 2008 |   |
| Balance, beginning of year                          |   | $                           | 614    |   |   | $ | 413 |   |
| Net liabilities (disposed) incurred during the year |   |                        | (26    | ) |   |   | 21 |   |
| Increase in liability due to change in estimate     |   |                        | -      |   |   |   | 4 |   |
| Liabilities settled during the year                 |   |                        | (65    | ) |   |   | (85 | ) |
| Liabilities acquired in year                        |   |                        | 3      |   |   |   | 223 |   |
| Accretion charges                                   |   |                        | 42     |   |   |   | 38 |   |
| Balance, end of year                                |   | $                           | 568    |   |   | $ | 614 |   |

|                            |   | As at December 31 |   |
|---------------------------------|--------|------------------------|--------|
|                            |   | 2009                   |   |   | 2008 |   |
| Property, plant and equipment   |   | $                      | (1,317 | ) |   | $ | (1,522 | ) |
| Risk management                 |   |                   | 39     |   |   |   | (132 | ) |
| Asset retirement obligations    |   |                   | 146    |   |   |   | 154 |   |
| Net future income tax liability |   | $                      | (1,132 | ) |   | $ | (1,500 | ) |
| Future income tax asset         |   |                   | 37     |   |   |   | - |   |
| Future income tax liability     |   | $                      | (1,169 | ) |   | $ | (1,500 | ) |

----

|                                        |   | Year ended December 31 |   |
|---------------------------------------------|--------|------------------------|--------|
|                                        |   | 2009                   |   |   | 2008 |   |
| Income (loss) before taxes                  |   | $                      | (522   | ) |   | $ | 1,356 |   |
| Combined statutory tax rate                 |   |                   | 29.5   | % |   |   | 30.1 | % |
| Computed income tax (recovery) provision    |   | $                      | (154   | ) |   | $ | 408 |   |
| Increase (decrease) resulting from:         |   |                   |   |   |   |   |   |   |
| Net Income attributable to the trust        |   |                   | (150   | ) |   |   | (338 | ) |
| Tax rate reductions                         |   |                   | (65    | ) |   |   | - |   |
| Unit-based compensation                     |   |                   | 15     |   |   |   | 13 |   |
| Unrealized foreign exchange                 |   |                   | (29    | ) |   |   | 30 |   |
| Previously unrecognized capital losses      |   |                   | (21    | ) |   |   | 21 |   |
| Adjustment for previously enacted tax rates |   |                   | 54     |   |   |   | 11 |   |
| Other                                       |   |                   | (28    | ) |   |   | (10 | ) |
| Future income tax (recovery) expense        |   | $                      | (378   | ) |   | $ | 135 |   |

----

| Unitholders’ capital                              |   | Units  |        |   | Amount |   |
|---------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Balance, December 31, 2007                              |   |   | 242,663,164 |   |   | $      | 3,877 |   |
| Issued on exercise of trust unit rights (1)             |   |   | 1,319,377   |   |   |   | 31 |   |
| Issued to employee trust unit savings plan              |   |   | 1,223,514   |   |   |   | 33 |   |
| Issued to distribution reinvestment plan                |   |   | 7,678,507   |   |   |   | 187 |   |
| Issued on convertible debentures                        |   |   | 85,975      |   |   |   | 3 |   |
| Issued on Canetic acquisition                           |   |   | 124,348,001 |   |   |   | 3,573 |   |
| Issued on Vault acquisition                             |   |   | 5,550,923   |   |   |   | 158 |   |
| Issued on Endev acquisition                             |   |   | 3,635,125   |   |   |   | 114 |   |
| Balance, December 31, 2008                              |   |   | 386,504,586 |   |   |   | 7,976 |   |
| Issued on exercise of trust unit rights (1)             |   |   | 414,745     |   |   |   | 9 |   |
| Issued to employee trust unit savings plan              |   |   | 2,579,500   |   |   |   | 37 |   |
| Issued to distribution reinvestment plan                |   |   | 8,221,146   |   |   |   | 111 |   |
| Issued on convertible debentures                        |   |   | 1,498,247   |   |   |   | 19 |   |
| Issued for trust unit offering (net of issue costs/tax) |   |   | 17,731,000  |   |   |   | 240 |   |
| Issued on Reece acquisition                             |   |   | 4,689,513   |   |   |   | 59 |   |
| Balance, December 31, 2009                              |   |   | 421,638,737 |   |   | $      | 8,451 |   |

|                            |   | Year ended December 31 |   |
|---------------------------------|--------|-----------------------------|--------|
|                            |   | 2009                        |   |   | 2008 |   |
| Balance, beginning of year      |   | $                           | 75     |   |   | $ | 35 |   |
| Unit-based compensation expense |   |                        | 52     |   |   |   | 45 |   |
| Benefit on rights exercised (1) |   |                        | (4     | ) |   |   | (5 | ) |
| Balance, end of year            |   | $                           | 123    |   |   | $ | 75 |   |

| (1) | The exercise of trust unit rights is reflected as a reduction of contributed surplus and an increase to unitholders’ capital. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------|

----

| Trust unit rights                                  |   | Number Outstanding |       |   | Weighted Average Exercise Price |   |   | Weighted AverageGrant Date Fair Value |   |
|----------------------------------------------------|--------|--------------------|------------|--------|---------------------------------|--------|--------|---------------------------------------|--------|
| Outstanding, December 31, 2007                     |   |               | 14,486,084 |   |                            | $      | 25.69  |                                  |   | $ | 4.91 |   |
| Granted                                            |   |               | 15,224,042 |   |                            |   | 26.96  |                                  |   |   | 5.09 |   |
| Exercised                                          |   |               | (1,319,377 | )      |                            |   | 19.95  |                                  |   |   | 3.27 |   |
| Forfeited                                          |   |               | (2,572,369 | )      |                            |   | 25.78  |                                  |   |   | 5.42 |   |
| Balance before reduction of exercise price         |   |               | 25,818,380 |   |                            |   | 26.72  |                                  |   |   | 5.05 |   |
| Reduction of exercise price for distributions paid |   |               | -          |   |                            |   | (3.84  | )                                     |   |   | - |   |
| Outstanding, December 31, 2008                     |   |               | 25,818,380 |   |                            | $      | 22.88  |                                  |   | $ | 5.05 |   |
| Granted                                            |   |               | 10,889,310 |   |                            |   | 12.88  |                                  |   |   | 1.72 |   |
| Exercised                                          |   |               | (414,745   | )      |                            |   | 13.38  |                                  |   |   | 2.17 |   |
| Forfeited                                          |   |               | (4,476,787 | )      |                            |   | 21.68  |                                  |   |   | 4.99 |   |
| Balance before reduction of exercise price         |   |               | 31,816,158 |   |                            |   | 19.75  |                                  |   |   | 3.95 |   |
| Reduction of exercise price for distributions paid |   |               | -          |   |                            |   | (2.10  | )                                     |   |   | - |   |
| Outstanding, December 31, 2009                     |   |               | 31,816,158 |   |                            | $      | 17.65  |                                  |   | $ | 3.95 |   |

----

| Unit Rights Outstanding |            |   | Unit Rights Exercisable |   |
|-------------------------|-----------------|--------|-------------------------|--------|
| Range of Grant Prices   |            |   | Number Outstanding      |   |   | Weighted Average Exercise Price (1) |   |   | Weighted Remaining Contractual Life (years) (2) |   |   | Number Exercisable |   |   | Weighted Average Exercise Price (1) |   |
|                    | $9.00 - $17.99  |   |                    |   | 9,985,663 |   |   | $ | 11.32 |   |   |   | 3.5 |   |   |   | - |   |   | $ | - |   |
|                    | $18.00 -$26.99  |   |                    |   | 9,632,841 |   |   |   | 20.29 |   |   |   | 2.4 |   |   |   | 3,357,848 |   |   |   | 20.38 |   |
|                    | $27.00 - $35.99 |   |                    |   | 10,899,124 |   |   |   | 19.83 |   |   |   | 1.8 |   |   |   | 7,008,560 |   |   |   | 18.88 |   |
|                    | $36.00 - $44.99 |   |                    |   | 1,298,530 |   |   |   | 28.52 |   |   |   | 2.5 |   |   |   | 789,120 |   |   |   | 28.52 |   |
|                    |            |   |                    |   | 31,816,158 |   |   | $ | 17.65 |   |   |   | 2.5 |   |   |   | 11,155,528 |   |   | $ | 20.01 |   |

| (1) | Exercise prices are adjusted for distributions if certain conditions are met. |
|-----|-------------------------------------------------------------------------------|

| (2) | Rights granted under the plan prior to November 13, 2006 expire after 6 years; rights granted after this date expire after 4 years. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------|

|                               | Year ended December 31 |   |
|------------------------------------|-----------------------------|--------|
| (millions)                         | 2009                        |   | 2008 |   |
| Operating expense                  |                        | $      | 13 |   |   | $ | 11 |   |
| General and administrative expense |                        |   | 39 |   |   |   | 34 |   |
| Unit-based compensation expense    |                        | $      | 52 |   |   | $ | 45 |   |

|                                                           |   | Year ended December 31 |   |
|----------------------------------------------------------------|--------|-----------------------------|--------|
|                                                           |   | 2009                        |   |   | 2008 |   |
| Average fair value of trust unit rights granted (per unit) (1) |   | $                           | 1.72   |   |   | $ | 5.09 |   |
| Expected life of trust unit rights (years)                     |   |                        | 3.0    |   |   |   | 3.0 |   |
| Expected volatility (average)                                  |   |                        | 32.1   | % |   |   | 27.0 | % |
| Risk-free rate of return (average)                             |   |                        | 2.1    | % |   |   | 3.0 | % |
| Distribution yield (2)                                         |   |                        | 11.9   | % |   |   | 18.1 | % |

| (1) | Calculated on a weighted average basis. |
|-----|-----------------------------------------|

| (2) | Represents distributions declared as a percentage of Penn West’s market price at the balance sheet date. |
|-----|----------------------------------------------------------------------------------------------------------------|

----

|                                                       |   | Year ended December 31 |   |
|------------------------------------------------------------|--------|-----------------------------|--------|
| Accumulated Cash Distributions                             |   | 2009                        |   |   | 2008 |   |
| Balance, beginning of year                                 |   | $                           | 3,660  |   |   | $ | 2,110 |   |
| Distributions declared                                     |   |                        | 841    |   |   |   | 1,550 |   |
| Balance, end of year                                       |   | $                           | 4,501  |   |   | $ | 3,660 |   |
|                                                       |   |                        |   |   |   |   |   |   |
| Distributions per unit (1)                                 |   | $                           | 2.04   |   |   | $ | 4.08 |   |
| Accumulated cash distributions per unit, beginning of year |   |                        | 14.18  |   |   |   | 10.10 |   |
| Accumulated cash distributions per unit, end of year       |   | $                           | 16.22  |   |   | $ | 14.18 |   |

| (1) | Distributions per unit are the sum of the per unit amounts declared monthly to unitholders. |
|-----|---------------------------------------------------------------------------------------------|

|           | Year ended December 31 |   |
|----------------|-----------------------------|--------|
|           | 2009                        |   | 2008 |   |
| Basic          |                        |   | 412,945,381 |   |   |   | 375,613,697 |   |
| Diluted Impact |                        |   | - |   |   |   | 7,299,138 |   |
| Diluted        |                        |   | 412,945,381 |   |   |   | 382,912,835 |   |

----

| (millions)               |   | 2010   |   |   | 2011   |   |   | 2012   |   |   | 2013 |   |   | 2014   |   |   | Thereafter |   |
|--------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|------|--------|--------|--------|--------|--------|------------|--------|
| Long-term debt           |   | $      | -      |   |   | $      | 1,874  |   |   | $      | -    |   |   | $      | 5      |   |       | $      | 62 |   |   | $ | 1,278 |   |
| Transportation           |   |   | 21     |   |   |   | 13     |   |   |   | 3    |   |   |   | -      |   |       |   | - |   |   |   | - |   |
| Transportation ($US)     |   |   | 3      |   |   |   | 3      |   |   |   | 3    |   |   |   | 3      |   |       |   | 3 |   |   |   | 3 |   |
| Power infrastructure     |   |   | 21     |   |   |   | 7      |   |   |   | 7    |   |   |   | 7      |   |       |   | 7 |   |   |   | 4 |   |
| Drilling rigs            |   |   | 12     |   |   |   | 3      |   |   |   | -    |   |   |   | -      |   |       |   | - |   |   |   | - |   |
| Purchase obligations (1) |   |   | 13     |   |   |   | 13     |   |   |   | 13   |   |   |   | 12     |   |       |   | 11 |   |   |   | 19 |   |
| Interest obligations     |   |   | 124    |   |   |   | 105    |   |   |   | 89   |   |   |   | 89     |   |       |   | 85 |   |   |   | 247 |   |
| Office lease (2)         |   | $      | 56     |   |   | $      | 72     |   |   | $      | 69   |   |   | $      | 67     |   |       | $      | 61 |   |   | $ | 605 |   |

| (1) | These amounts represent estimated commitments of $62million for CO2 purchases and $19 million for processing fees related to interests in the Weyburn Unit. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Future office lease commitments will be reduced by sublease recoveries totalling $397 million. |
|-----|------------------------------------------------------------------------------------------------|

|                                     |   | Year ended December 31 |   |
|------------------------------------------|--------|-----------------------------|--------|
|                                     |   | 2009                        |   |   | 2008 |   |
| Accounts receivable                      |   | $                           | 15     |   |   | $ | (109 | ) |
| Other current assets                     |   |                        | 5      |   |   |   | (60 | ) |
| Accounts payable and accrued liabilities |   |                        | (115   | ) |   |   | 271 |   |
| Acquisitions                             |   |                        | (11    | ) |   |   | (273 | ) |
|                                     |   | $                           | (106   | ) |   | $ | (171 | ) |
| Operating activities                     |   | $                           | (27    | ) |   | $ | (196 | ) |
| Investing activities                     |   |                        | (79    | ) |   |   | 25 |   |
|                                     |   | $                           | (106   | ) |   | $ | (171 | ) |

----

| Purchase price                             |   | (millions) |   |
|--------------------------------------------|--------|------------|--------|
| 124.3 million Penn West trust units issued |   | $          | 3,573  |   |
| Transaction costs                          |   |       | 22     |   |
|                                       |   | $          | 3,595  |   |
|                                       |   |       |   |   |
| Allocation of purchase price               |   |       |   |   |
| Property, plant and equipment              |   | $          | 4,979  |   |
| Goodwill                                   |   |       | 1,348  |   |
| Working capital deficiency                 |   |       | (274   | ) |
| Bank debt                                  |   |       | (1,443 | ) |
| Convertible debentures                     |   |       | (261   | ) |
| Risk management liability                  |   |       | (65    | ) |
| Future income taxes                        |   |       | (511   | ) |
| Asset retirement obligations               |   |       | (178   | ) |
|                                       |   | $          | 3,595  |   |

----

| Purchase price                           |   | (millions) |   |
|------------------------------------------|--------|------------|--------|
| 5.6 million Penn West trust units issued |   | $          | 158    |   |
| Transaction costs                        |   |       | 6      |   |
|                                     |   | $          | 164    |   |
|                                     |   |       |   |   |
| Allocation of purchase price             |   |       |   |   |
| Property, plant and equipment            |   | $          | 346    |   |
| Goodwill                                 |   |       | 20     |   |
| Working capital                          |   |       | 2      |   |
| Future income taxes                      |   |       | 47     |   |
| Bank debt                                |   |       | (114   | ) |
| Convertible debentures                   |   |       | (99    | ) |
| Risk management liability                |   |       | (2     | ) |
| Asset retirement obligations             |   |       | (36    | ) |
|                                     |   | $          | 164    |   |

----

|                                              |   | Pro forma year ended December 31 (1) |   |
|---------------------------------------------------|--------|-------------------------------------------|--------|
| (millions, except ratio amounts)                  |   | 2009                                      |   |   | 2008 |   |
| Components of capital                             |   |                                      |   |   |   |   |
| Unitholders’ equity                         |   | $                                         | 7,918  |   |   | $ | 8,380 |   |
| Long-term debt                                    |   | $                                         | 3,219  |   |   | $ | 3,854 |   |
| Convertible debentures                            |   | $                                         | 273    |   |   | $ | 296 |   |
| Ratios                                            |   |                                      |   |   |   |   |   |   |
| Senior debt to pro forma EBITDA (2)               |   |                                      | 2.0    |   |   |   | 1.4 |   |
| Total debt (9) to pro forma EBITDA (3)            |   |                                      | 2.0    |   |   |   | 1.4 |   |
| Senior debt to capitalization (4)                 |   |                                      | 28     | % |   |   | 31 | % |
| Total debt (9) to capitalization (5)              |   |                                      | 28     | % |   |   | 31 | % |
| Total debt (10) to capitalization (5)             |   |                                      | 31     | % |   |   | 33 | % |
| Priority debt to consolidated tangible assets (6) |   |                                      | -      |   |   |   | - |   |
| Pro forma EBITDA                                  |   | $                                         | 1,654  |   |   | $ | 2,762 |   |
|                                              |   |                                      |   |   |   |   |   |   |
| Credit facility debt and senior notes             |   | $                                         | 3,219  |   |   | $ | 3,854 |   |
| Letters of credit                                 |   |                                      | 2      |   |   |   | 1 |   |
| Total senior debt                                 |   |                                      | 3,221  |   |   |   | 3,855 |   |
| Convertible debentures (7)                        |   |                                      | 26     |   |   |   | 42 |   |
| Total debt (9)                                    |   |                                      | 3,247  |   |   |   | 3,897 |   |
| Convertible debentures (8)                        |   |                                      | 247    |   |   |   | 254 |   |
| Total debt (10)                                   |   |                                      | 3,494  |   |   |   | 4,151 |   |
| Total unitholders’ equity                   |   |                                      | 7,918  |   |   |   | 8,380 |   |
| Total capitalization                              |   | $                                         | 11,412 |   |   | $ | 12,531 |   |

| (1) | Pro forma includes the effect of significant acquisitions and dispositions completed during the year as if they occurred at the beginning of the period. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Less than 3:1 and not to exceed 3.5:1 in the event of a material acquisition. |
|-----|-------------------------------------------------------------------------------|

| (3) | Less than 4:1. |
|-----|----------------|

| (4) | Not to exceed 50 percent except in the event of a material acquisition when the ratio is not to exceed 55 percent. |
|-----|--------------------------------------------------------------------------------------------------------------------|

| (5) | Not to exceed 55 percent except in the event of a material acquisition when the ratio is not to exceed 60 percent. |
|-----|--------------------------------------------------------------------------------------------------------------------|

| (6) | Priority debt not to exceed 15% of consolidated tangible assets. |
|-----|------------------------------------------------------------------|

| (7) | Convertible debentures not meeting the requirements for equity classification under lending agreements. |
|-----|---------------------------------------------------------------------------------------------------------|

| (8) | Convertible debentures not meeting the requirements for equity classification under the 2007 Notes. |
|-----|-----------------------------------------------------------------------------------------------------|

| (9) | Total debt as defined in the 2008 Notes, UK Notes and the syndicated bank facility agreements, which includes convertible debentures that do not meet the requirement for equity classification in these agreements. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (10) | Total debt as defined in the 2007 Notes agreement, which includes convertible debentures that do not meet the requirements for equity classification in this agreement. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----