**U.S. SECURITIES AND EXCHANGECOMMISSION****Washington, D.C. 20549**

**FORM 40-F**

**(CheckOne)**

**o Registration statement pursuant to Section 12of the Securities Exchange Act of 1934**

**or**

**x Annual report pursuant to section 13(a) or15(d) of the Securities Exchange Act of 1934**

 

**For thefiscal year ended December 31, 2006**

**Commissionfile number 1-32728**

**CANETIC RESOURCES TRUST**

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

** **

**1900, 255 - 5 Avenue SW, Calgary, Alberta, Canada  T2P 3G6(403) 539-6300** (Address and Telephone Numberof Registrant’s Principal Executive Offices)

**DLServices Inc., 1420 Fifth Avenue, Suite 3400, Seattle, WA  98101(206) 903-5448**(Name, Address (Including Zip Code) and Telephone Number (Including Area Code) of Agent For Service in the United States)

Securities registered orto be registered pursuant to Section 12(b) of the Act.

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

 

Securities registered orto be registered pursuant to Section 12(g) of the Act:  **None**

Securities for whichthere is a reporting obligation pursuant to Section 15(d) of the Act:  **None**

For annual reports,indicate by check mark the information filed with this Form:
| x  Annual Information Form | x  Audited Annual Financial Statements |
|----------------------------|----------------------------------------|

 

Indicate the number of outstanding shares of each of the issuer’sclasses of capital or common stock as of the close of the period covered by theannual report:

225,795,723 million trustunits

 

Indicate by check mark whether the registrant by filing the informationcontained in this Form is also thereby furnishing the information to theCommission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934(the “Exchange Act”).  If “Yes” ismarked, indicate the file number assigned to the registrant in connection withsuch rule.

Yes  o                 No  x

Indicate by check mark whether the registrant: (1) has filed allreports required to be filed by Section 13 or 15(d) of the Exchange Act duringthe preceding 12 months (or for such shorter period that the registrant wasrequired to file such reports); and (2) has been subject to such filingrequirements for the past 90 days.

Yes  x                 No  o

 

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**FORM 40-F**

**Principal Documents**

The followingdocuments, filed as Exhibits 99.1, 99.2 and 99.3 to this Annual Report on Form40-F, are hereby incorporated by reference into this Annual Report on Form40-F:

(a)                                  AnnualInformation Form for the fiscal year ended December 31, 2006;

(b)                                 Management’sDiscussion and Analysis of Financial Condition and Results of Operations forthe fiscal year ended December 31, 2006; and

(c)                                  ConsolidatedFinancial Statements for the fiscal year ended December 31, 2006 *(Note 15 to the Consolidated Financial Statements relates to thedifferences between Canadian and United States Generally Accepted AccountingPrinciples).*

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**ADDITIONALDISCLOSURE**

**Certifications and DisclosureRegarding Controls and Procedures**

(a)                                  Certifications.  See Exhibits 99.4 and 99.5 to this AnnualReport on Form 40-F.

(b)                                 DisclosureControls and Procedures.  As of theend of Canetic’s fiscal year ended December 31, 2006, an evaluation of theeffectiveness of Canetic’s “disclosure controls and procedures” (as such termis defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of1934, as amended (the “Exchange Act”)) was carried out by the management ofCanetic Resources Inc., the administrator of Canetic Resources Trust, with theparticipation of the President and Chief Executive Officer (“CEO”) and the VicePresident and Chief Financial Officer (“CFO”) of Canetic Resources Inc., whoalso perform such functions for Canetic Resources Trust.  Based upon that evaluation, the CEO and CFOhave concluded that as of the end of that fiscal year, Canetic’s disclosurecontrols and procedures are effective to ensure that information required to bedisclosed by Canetic in reports that it files or submits under the Exchange Actis (i) recorded, processed, summarized and reported within the time periodsspecified in Securities and Exchange Commission rules and forms and (ii)accumulated and communicated to Canetic’s management, including its principalexecutive officer and principal financial officer, to allow timely decisionsregarding required disclosure.

It should be noted that while the CEO and CFO believethat Canetic’s disclosure controls and procedures provide a reasonable level ofassurance that they are effective, they do not expect that Canetic’s disclosurecontrols and procedures or internal control over financial reporting willprevent all errors and fraud.  A controlsystem, no matter how well conceived or operated, can provide only reasonable,not absolute, assurance that the objectives of the control system are met.

(c)                                  Changesin Internal Control Over Financial Reporting.  During the fiscal year ended December 31,2006, there were no changes in Canetic’s internal control over financialreporting that have materially affected, or are reasonably likely to materiallyaffect, Canetic’s internal control over financial reporting.

**NoticesPursuant to Regulation BTR**

None.

**AuditCommittee Financial Expert**

Canetic’s board ofdirectors has determined that W. Peter Comber, a member of Canetic’s auditcommittee, qualifies as an “audit committee financial expert” (as such term isdefined in Form 40-F).  Mr. Comber is “independent”as that term in defined in the rules of the New York Stock Exchange.

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Mr. Comber holds a Bachelorof Arts degree from the University of Toronto, a Masters of BusinessAdministration from York University and is a Chartered Accountant.  Mr. Comber has been engaged in variousaspects of the financial services industry since 1965, first as a charteredaccountant, then in corporate finance in Toronto and Calgary and then ininvestment management, as an investment counselor. Since August 1999 Mr. Comberhas been managing director of Barrantagh Investment Management Inc., investmentcounselors based in Toronto, Ontario. From May 1993 to August 1999, Mr. Comber was the President ofNewtonhouse Investment Management Ltd., investment counselors located inToronto Ontario.  Between June 1989 andDecember 31, 1991, Mr. Comber was Senior Vice-President of Thornmark CapitalCorporation, an investment holding company, and principal officer of ThornmarkCapital Funding Corporation, merchant bank. Prior to June 1989, Mr. Comber was Senior Vice-President and ManagingDirector of Prudential-Bache Securities Canada Limited, an investment dealer inToronto, Ontario.  Mr. Comber is adirector of Nuvista Energy Ltd., and Sure Energy Inc. and serves as chairman ofthe audit committee for each of the aforementioned companies.  Over the course of his career, he hasacquired competence in the audit and accounting issues facing public companiesand considerable knowledge of financial reporting procedures and controls

**Code ofBusiness Conduct**

Canetic has adopted a Code of Ethical Conduct thatconstitutes a “code of ethics” as defined in Form 40-F and that applies to alldirectors, officers and employees of Canetic.

The Code of Ethical Conduct is available for viewingon Canetic’s website at www.canetictrust.com, and is available in print to anyunitholder who requests a copy of it. Requests for copies of the Code of Ethical Conduct should be made bycontacting: Brian D. Evans, Vice President, General Counsel and Secretary,Canetic Resources Inc., 1900, 255 — 5th Avenue SW, Calgary, Alberta Canada  T2P 3G6, Phone (403) 539-5908.

Since the adoptionof the Code of Ethical Conduct, there have not been any amendments to, orwaivers, including implicit waivers, from, any provision of the Code of EthicalConduct.

**Principal Accountant Fees and Services**

The followingtable sets forth information about the fees billed to Canetic for professionalservices provided by Deloitte & Touche LLP during fiscal 2006 and 2005:
| **(CDN$)**          | ** ** | **2006** | ** ** | **2005** | ** ** |
|---------------------|------------|----------|------------|----------|------------|
| Audit Fees          |       | $        | 497,140    |     | $          | 200,000 |   |
| Audit-Related  Fees |       | $        | 418,442    |     | $          | 314,000 |   |
| Tax Fees            |       | $        | 18,675     |     | $          | 205,550 |   |
| All Other Fees      |       | $        | 247,611    |     | $          | 112,150 |   |
| Total               |       | $        | 1,181,868  |     | $          | 831,700 |   |

 

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Audit Fees. Audit fees consist of feesfor the audit of Canetic’s annual financial statements or services that arenormally provided in connection with statutory and regulatory filings orengagements.

Audit-Related Fees. Audit-relatedfees consist of fees for assurance and related services that are reasonablyrelated to the performance of the audit or review of Canetic’s financialstatements and are not reported as Audit Fees. During fiscal 2006 and 2005, theservices provided in this category included Quarterly Reviews, ProspectusFilings, 40-F Registration Filings, Review of Internal Controls over FinancialReporting and Research of Accounting and Audit related issues.

Tax Fees. Tax fees in 2006 and 2005consist of fees for tax advice and compliance pertaining to filing of Canetic’sannual tax returns.

**Pre-Approval Policies and Procedures**

(a)                                  Canetic has adopted procedures with respectto the pre-approval of audit and permitted non-audit services to be provided byDeloitte & Touche LLP.  All audit andnon-audit services must be approved in advance by the audit committee of theBoard of Directors in the following manner. The audit committee in consultation with Deloitte & Touche LLP hasestablished a budget for the provision of a specified list of audit andpermitted non-audit services that the audit committee believes to be typical,recurring or otherwise likely to be provided by Deloitte & Touche LLP.  The budget generally covers the periodbetween the adoption of the budget and the next meeting of the audit committee,but at the option of the audit committee it may cover a longer or shorterperiod.  The list of services issufficiently detailed as to the particular services to be provided to ensurethat (i) the audit committee knows precisely what services it is being asked topre-approve and (ii) it is not necessary for any member of management to make ajudgment as to whether a proposed service fits within the pre-approved services

(b)                                 Ofthe fees reported in this Annual Report on Form 40-F under the heading “PrincipalAccountant Fees and Services”, none of the fees billed by Deloitte & ToucheLLP were approved by Canetic’s audit committee pursuant to the *de minimus* exception provided by Section (c)(7)(i)(C) ofRule 2-01 of Regulation S-X.

**Off-Balance Sheet Arrangements**

The registrant does not have any off-balance sheetfinancing arrangements that have or are reasonably likely to have a materialeffect on its financial condition, changes in financial condition, revenues orexpenses, results of operations, liquidity, capital expenditures or capitalresources.

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**Tabular Disclosure of Contractual Obligations**
| **(CDN$ millions)**                   | ** ** | ** ** | ** ** | **Payment due by period** | ** ** |
|--------------------------------------------|------------|------------|------------|------------------------------------------|------------|
| **Contractual Obligations**           | ** ** | **Total**  | ** ** | **Less than  1 Year**          | ** ** | **1 to 3  Years** | ** ** | **3 to 5  Years** | ** ** | **More than  5 Years** | ** ** |
| Bank debt                                  |       | 1,289,678  |       | —                                   |       | 1,289,678 |   | — |   | — |   |
| Interest on bank  debt (1)                 |       | 264,642    |       | 66,160                                   |       | 198,481 |   | — |   | — |   |
| Convertible  debentures                    |       | 260,656    |       | 1,697                                    |       | 13,668 |   | 245,291 |   | — |   |
| Interest on  convertible debentures        |       | 82,558     |       | 17,467                                   |       | 34,033 |   | 31,058 |   | — |   |
| Office operating  leases                   |       | 24,659     |       | 6,415                                    |       | 12,590 |   | 5,654 |   | — |   |
| Purchase  Obligations (gas transportation) |       | 6,116      |       | 636                                      |       | 1,616 |   | 2,500 |   | 1,364 |   |
| Total                                      |       | 1,928,309  |       | 92,376                                   |       | 1,550,066 |   | 284,503 |   | 1,364 |   |

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(1)                                Interest is calculated on the outstandingbalance at the end of the year at the average interest rate of 5.13% incurredby Canetic on bank debt.

**Identification of the Audit Committee**

Canetic has aseparately-designated standing audit committee established in accordance withSection 3(a)(58)(A) of the Exchange Act. The members of the audit committee are: W. Peter Comber, Robert G. Brawn, Daryl Gilbert and Jack C. Lee.

**Disclosure Pursuant to the Requirements of the NewYork Stock Exchange**

**Independence of Directors**

Canetic’s board of directors has determined that eachof Canetic’s directors, except J. Paul Charron, who is the President and ChiefExecutive Officer of Canetic Resources Inc., is “independent” within themeaning of the rules of the New York Stock Exchange.  The basis for the board’s determination isthat none of the directors (other than Mr. Charron) have any business, familyor other relationship, or are employees or directors of any entity that has anybusiness, family or other relationship, with Canetic or its affiliates.  With respect to members of the auditcommittee, the board alsodetermined that each member of the audit committee is independent pursuant toRule 10A-3 of the Exchange Act.

**Presiding Director at Meetings of Non-ManagementDirectors**

Canetic schedules regular executive sessions in whichCanetic’s “non-management directors” (as that term is defined in the rules ofthe New York Stock Exchange) meet without management participation.  Jack C. Lee serves as the presiding director(the “Presiding Director”) at such sessions. Each of Canetic’s non-management directors is “independent” within themeaning of the rules of the New York Stock Exchange.

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**Communication with Non-ManagementDirectors**

Shareholders maysend communications to Canetic’s non-management directors by writing to Jack C.Lee, c/o 405, 505 Third Street S.W., Calgary, Alberta Canada T2P 3E6.  Communications will be referred to thePresiding Director for appropriate action. The status of all outstanding concerns addressed to the PresidingDirector will be reported to the board of directors as appropriate.

**Corporate Governance Guidelines**

In accordance with the rules of the New York StockExchange, Canetic has adopted corporate governance guidelines, entitled “GovernanceGuidelines”, that are available for viewing on Canetic’s website atwww.canetictrust.com and are available in print to any unitholder who requestsa copy of them.  Requests for copies ofthe Governance Guidelines should be made by contacting: Brian D. Evans, VicePresident, General Counsel and Secretary, Canetic Resources Inc., 1900, 255 — 5th Avenue SW, Calgary, Alberta Canada  T2P 3G6, Phone (403) 539-5908.

**Board Committee Mandates**

The Mandates ofCanetic’s audit committee, human resources and compensation committee, andnominating and corporate governance committee are each available for viewing onCanetic’s website at www.canetictrust.com, and are available in print to anyunitholder who requests them.  Requestsfor copies of these documents should be made by contacting: Brian D. Evans,Vice President, General Counsel and Secretary, Canetic Resources Inc., 1900,255 — 5th Avenue SW, Calgary, Alberta Canada  T2P 3G6, Phone (403) 539-5908.

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**UNDERTAKING AND CONSENT TO SERVICE OF PROCESS**

**A.            Undertaking**

Canetic undertakesto make available, in person or by telephone, representatives to respond toinquiries made by the Securities and Exchange Commission (the “Commission”)staff, and to furnish promptly, when requested to do so by the Commissionstaff, information relating to:  thesecurities registered pursuant to Form 40­F; the securities in relation towhich the obligation to file an annual report on Form 40-F arises; ortransactions in said securities.

**B.****                                    Consentto Service of Process**

Canetic haspreviously filed a Form F-X in connection with the class of securities inrelation to which the obligation to file this report arises.

Any change to thename or address of the agent for service of process of Canetic shall becommunicated promptly to the Commission by an amendment to the Form F-Xreferencing the file number of the relevant registration statement.

**SIGNATURES**

Pursuant to therequirements of the Exchange Act, Canetic certifies that it meets all of therequirements for filing on Form 40-F and has duly caused this annual report tobe signed on its behalf by the undersigned, thereunto duly authorized, on March28, 2007.
|          | **CANETIC RESOURCES TRUST**   |
|----------|-------------------------------|
|     | **By Canetic Resources Inc.** |
| * * |                          |
| * * |                          |
| * * | By:                           | */s/ J. Paul Charron* |
| * * | Name:                         | J. Paul Charron |
| * * | Title:                        | President and Chief Executive Officer |

 

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**EXHIBIT INDEX**
| Exhibit | ** ** | **Description**                                                                                                                          |
|---------|------------|------------------------------------------------------------------------------------------------------------------------------------------|
|    |       |                                                                                                                                     |
| 99.1    |       | Annual Information Form for the fiscal year ended  December 31, 2006                                                                     |
|    |       |                                                                                                                                     |
| 99.2    |       | Management’s Discussion and Analysis of Financial  Condition and Results of Operations for the fiscal year ended December 31,  2006 |
|    |       |                                                                                                                                     |
| 99.3    |       | Consolidated Financial Statements for the fiscal  year ended December 31, 2006                                                           |
|    |       |                                                                                                                                     |
| 99.4    |       | Certification of Chief Executive Officer pursuant to  Rule 13a-14(a) or 15d-14 of the Securities Exchange Act of 1934                    |
|    | ** ** | ** **                                                                                                                               |
| 99.5    |       | Certification of Chief Financial Officer pursuant to  Rule 13a-14(a) or 15d-14 of the Securities Exchange Act of 1934                    |
|    |       |                                                                                                                                     |
| 99.6    |       | Certification of Chief Executive Officer pursuant to  18 U.S.C. Section 1350                                                             |
|    |       |                                                                                                                                     |
| 99.7    |       | Certification of Chief Financial Officer pursuant to  18 U.S.C. Section 1350                                                             |
|    |       |                                                                                                                                     |
| 99.8    |       | Consent of Deloitte & Touche LLP                                                                                                     |
|    |       |                                                                                                                                     |
| 99.9    |       | Consent of GLJ Petroleum Consultants Ltd.                                                                                                |
|    |       |                                                                                                                                     |
| 99.10   |       | Consent of Sproule Associates Limited                                                                                                    |
|    |       |                                                                                                                                     |

 

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