Penn West enters Arrangement Agreement to acquire Vault Energy Trust

    CALGARY, Sept. 25 /CNW/ - (TSX - PWT.UN; NYSE - PWE) - Penn West Energy
Trust ("Penn West") is pleased to announce that it has entered into an
Arrangement Agreement to acquire all of the outstanding units, exchangeable
shares and warrants of Vault Energy Trust ("Vault").
    The acquisition will be accomplished through a Plan of Arrangement (the
"Arrangement") wherein each Vault trust unit ("Vault Unit") will be exchanged
for 0.14 of a Penn West trust unit and all Vault exchangeable shares will be
exchanged for Penn West trust units based on the exchange ratio for Vault
units in effect at the effective date of the Arrangement. The transaction
exchange ratio represents a premium to Vault Unitholders of 6% based on the
respective volume weighted average unit trading price for each trust for the
ten trading days up to September 24, 2007. Including the assumption of Vault's
total debt including its convertible debentures, the total acquisition cost is
expected to be approximately $380 million. It is expected that approximately
5.5 million Penn West trust units will be issued to effect the Arrangement.
    The acquisition is expected to be accretive to Penn West's unitholders on
a production, cash flow and reserves basis. The transaction is expected to add
current production of approximately 6,500 barrels of oil equivalent per day,
weighted 65% to natural gas and 35% to light oil and natural gas liquids.
Reserves for the acquired properties will be evaluated by Penn West's
independent reserves evaluator at year-end. It is also expected to increase
Penn West's tax pool position by approximately $500 million and increase its
ceiling under the federal government's "undue expansion" rules related to the
2011 tax on "Specified Investment Flow-Through" entities to approximately
$10.4 billion. Vault's Alberta properties include Wimborne, Bigoray, Pembina,
Crystal and Westerose, all of which are strategically located at or near some
of Penn West's central area core light oil properties. Additionally, Vault's
significant natural gas properties in northeast British Columbia and northwest
Alberta complement existing Penn West properties. In connection with the
acquisition, Penn West will also add approximately 120,000 net undeveloped
acres to its land base of approximately 3.5 million net undeveloped acres.
    The successful completion of the Arrangement is subject to the approval
of at least two-thirds of Vault's unitholders, exchangeable shareholders and
warrant holders as well as stock exchange, court and regulatory approvals. The
related information circular is expected to be mailed to Vault unitholders in
late October 2007. It is anticipated that the special meeting of Vault's
unitholders will be held in November 2007. Assuming the Arrangement
subsequently closes in December 2007, Vault unitholders will receive Penn
West's December distribution on January 15, 2008. Subsequent to the close of
the Arrangement, pursuant to the terms of Vault's convertible debenture
agreements, Penn West will offer to re-purchase all of Vault's outstanding
    The Board of Directors of both Penn West and Vault unanimously approved
the Arrangement. The Board of Directors of Vault has concluded that the
transaction is in the best interests of the Vault unitholders, exchangeable
shareholders and warrant holders from a financial perspective and resolved to
recommend that unitholders, exchangeable shareholders and warrant holders of
Vault vote their units and shares in favour of the Arrangement. The Directors
and Officers of Vault have entered into support agreements with Penn West to
tender their trust units, exchangeable shares and warrants to the Arrangement.
    The Arrangement prohibits Vault from soliciting or initiating any
discussion regarding any other business combination or sale of material
assets, contains provisions for Penn West to match competing, unsolicited
proposals and, subject to certain conditions, provides for a $10 million
termination fee.

    Financial Advisors

    Scotia Capital Inc. is acting as exclusive financial advisor to Vault
with respect to this transaction and has advised the Board of Directors of
Vault that subject to review of definitive legal agreements, they are of the
opinion, as of the date hereof, that the consideration to be received by the
Vault unitholders and exchangeable shareholders is fair, from a financial
point of view, to Vault unitholders and exchangeable shareholders.

    Forward-Looking Statements

    In the interest of providing Penn West's unitholders and potential
investors with information regarding Penn West, including management's
assessment of Penn West's future plans and operations, certain statements
contained in this document constitute forward-looking statements or
information (collectively "forward-looking statements") within the meaning of
the "safe harbour" provisions of applicable securities legislation.
Forward-looking statements are typically identified by words such as
"anticipate", "continue", "estimate", "expect", "forecast", "may", "will",
"project", "could", "plan", "intend", "should", "believe", "outlook",
"potential", "target" and similar words suggesting future events or future
performance. In addition, statements relating to "reserves" or "resources" are
deemed to be forward-looking statements as they involve the implied
assessment, based on certain estimates and assumptions, that the reserves and
resources described exist in the quantities predicted or estimated and can be
profitably produced in the future. In particular, this document contains,
without limitation, forward-looking statements pertaining to the expectations
of the management of the proposed acquisitions of Vault Energy Trust,
including operating and financial metrics of the acquisition and the effect on
Penn West's production, cash flow, reserves, undeveloped land position and tax
    With respect to forward-looking statements contained in this document, we
have made assumptions regarding, among other things: future oil and natural
gas prices and differentials between light, medium and heavy oil prices;
future oil and natural gas production levels; and future exchange rates.
    Although Penn West believes that the expectations reflected in the
forward-looking statements contained in this document, and the assumptions on
which such forward-looking statements are made, are reasonable, there can be
no assurance that such expectations will prove to be correct. Readers are
cautioned not to place undue reliance on forward-looking statements included
in this document as there can be no assurance that the plans, intentions or
expectations upon which the forward-looking statements are based will occur.
By their nature, forward-looking statements involve numerous assumptions,
known and unknown risks and uncertainties that contribute to the possibility
that the predictions, forecasts, projections and other forward-looking
statements will not occur, which may cause Penn West's actual performance and
financial results in future periods to differ materially from any estimates or
projections of future performance or results expressed or implied by such
forward-looking statements. These risks and uncertainties include, among other
things: volatility in market prices for oil and natural gas; the impact of
weather conditions on seasonal demand; risks inherent in oil and gas
operations; uncertainties associated with estimating reserves and resources;
competition for, among other things, capital, acquisitions of reserves,
resources, undeveloped lands and skilled personnel; incorrect assessments of
the value of acquisitions; geological, technical, drilling and processing
problems; general economic conditions in Canada, the U.S. and globally;
industry conditions, including fluctuations in the price of oil and natural
gas; royalties payable in respect of our oil and natural gas production;
changes in government regulation of the oil and natural gas industry,
including environmental regulation; fluctuations in foreign exchange or
interest rates; unanticipated operating events that can reduce production or
cause production to be shut-in or delayed; failure to obtain industry partner
and other third-party consents and approvals when required; stock market
volatility and market valuations; OPEC's ability to control production and
balance global supply and demand of crude oil at desired price levels;
political uncertainty, including the risks of hostilities, in the petroleum
producing regions of the world; the need to obtain required approvals from
regulatory authorities from time to time; failure to realize the anticipated
benefits of acquisitions, including the acquisition of Vault Energy Trust;
failure to obtain required approvals or otherwise complete the acquisitions on
the expected timeline; and the other factors described in Penn West's public
filings (including its Annual Information Form) available in Canada at and in the United States at Readers are cautioned
that this list of risk factors should not be construed as exhaustive.
    The forward-looking statements contained in this document speak only as
of the date of this document. Except as expressly required by applicable
securities laws, Penn West does not undertake any obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. The forward-looking statements
contained in this document are expressly qualified by this cautionary

    Penn West Energy Trust is a senior oil and natural gas energy trust based
in Calgary, Alberta that trades on the Toronto Stock Exchange under the symbol
PWT.UN and on the New York Stock Exchange under the symbol PWE.

    %SEDAR: 00022266E          %CIK: 0001334388

For further information:

For further information: PENN WEST ENERGY TRUST: Suite 2200, 425 - First
Street S.W., Calgary, Alberta, T2P 3L8, Phone: (403) 777-2500, Toll-free:
1-866-693-2707, Fax: (403) 777-2699, Website:; Investor
Relations: Phone: 1-888-770-2633, E-mail:;
William Andrew, President and CEO, Phone: (403) 777-2502

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