Penn West Energy Trust

Published : January 15th, 2009

announces 2009 capital program guidance and January cash distribution

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Penn West Energy Trust announces 2009 capital program guidance and January cash distribution

     CALGARY, Jan. 14 /CNW/ - (TSX - PWT.UN; NYSE - PWE) Penn West Energy
Trust ("Penn West") is providing guidance on our 2009 capital program and is
announcing a change to our current monthly distribution.
     During 2008 Penn West took steps to ensure balance sheet strength
including diversifying our debt, initiating a marketing process to sell
certain of our non-core assets and hedging more than 25 percent of our 2009
production (before royalties) at prices that are well above current commodity
strip pricing. We believe that these actions, and those we are now taking
regarding our 2009 capital program and distribution level, are prudent and
appropriate given the current state of the petroleum industry and the economy.
These actions allow us to maintain financial flexibility as we evaluate
opportunities available to us in 2009 and beyond.

     2009 Capital Program/Production Guidance

     We anticipate our 2009 capital expenditures will total between $600
million and $825 million dollars. Petroleum industry costs have not yet
declined to the same extent as commodity prices, thus we intend to limit our
near-term capital expenditures until supply and service costs are more
reflective of current commodity pricing. We anticipate spending between $250
million and $325 million in the first half of 2009, a reduction of
approximately 50 percent from first half 2008 capital expenditures. Our 2009
capital program will emphasize low-risk projects with a focus on low-cost
volume additions through production optimization and low to medium risk
drilling favouring light oil and natural gas over heavy oil. We will also
continue to aggressively develop our Lower Shaunavon oil resource play in
southwestern Saskatchewan. We have positioned our capital project inventory to
enable expansion of our 2009 program when commodity prices and industry costs
improve from current levels. Based on this level of capital expenditures, we
anticipate our production volumes will average approximately 180,000 boe per
day in the first half of 2009. (This volume would be reduced by the amount of
any dispositions that close in the first half of 2009.)

     Disposition Update

     Late in 2008, we placed various producing assets deemed non-core into the
market for sale. We anticipate closing all pending deals by the end of the
first quarter with estimated combined proceeds of $150 million. These proceeds
will be applied to our bank debt.

     Hedging Program

     In 2008 we actively hedged our 2009 production to mitigate the impact of
commodity price volatility. We monitor the commodity markets on an ongoing
basis for opportunities to provide price protection for both distribution and
capital programs. We currently have approximately 31 percent of our 2009 crude
oil production hedged (before royalties) with a floor WTI price of US$80.00
per barrel and a ceiling price of US$110.21 per barrel. Approximately 20
percent of our 2009 natural gas volumes have been hedged (before royalties)
with floors of CAD$7.88 per gigajoule and ceilings of CAD$11.27 per gigajoule
at AECO. We continue to monitor the forward markets for opportunities to hedge
our production when commodity prices improve.


     At planned levels of 2009 capital expenditures and current 2009 future
commodity price strips, we believe the appropriate distribution level is $0.23
per unit per month. Accordingly, our Board of Directors recently approved a
reduction to our monthly distribution to unitholders from $0.34 per unit to
$0.23 per unit for the next two months, subject to changes in commodity
prices, production levels and capital expenditures. The January 2009
distribution of $0.23 is payable on February 13, 2009 to unitholders of record
on January 30, 2009. The ex-distribution date is January 28, 2009. Registered
unitholders with U.S. addresses will receive their distributions directly from
Penn West's transfer agent, and will be paid in U.S. currency using the
exchange rate in effect on the record date. Non-registered U.S. unitholders
will receive their distributions through their brokers.

     Penn West has a strong, diversified portfolio of producing oil and
natural gas properties with an emphasis on light oil. In addition, we have a
significant undeveloped land base and portfolio of future development
opportunities. We believe that with prudent management of our balance sheet
and a focused capital program we are well equipped to handle the challenges
posed by the economic downturn. We will be closely monitoring commodity
prices, service costs and funds flow to ensure that capital spending and
monthly cash distribution levels remain appropriate.

     Financial Information

     Unless otherwise stated, all dollar amounts are stated in Canadian

     Boe Conversion

     Boes (barrels of oil equivalent) are derived by converting gas to oil in
the ratio of six thousand cubic feet ("Mcf") of gas to one barrel ("bbl") of
oil (6 Mcf : 1 bbl).  Boes may be misleading, particularly if used in
isolation. A boe conversion ratio of six thousand cubic feet to one barrel is
based on an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the wellhead.

     Forward-Looking Statements

     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 particular, this document contains forward-looking statements
pertaining to, without limitation, the following: management's expectations as
to the amount of our 2009 annual and first half capital expenditure budget and
the nature of the expenditures to be made; management's expectations as to our
average daily 2009 production volumes; the status of our ongoing asset
disposition program, including the timing for closing potential dispositions
and the amount and use of proceeds obtained therefrom; future distribution
levels; and our ability to manage the challenges posed by the economic
downturn. 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 capital expenditure levels; future oil and natural gas
production levels; future exchange rates; the amount of future cash
distributions that we intend to pay; our ability to market our oil and natural
gas successfully to current and new customers; the impact of increasing
competition; our ability to obtain financing on acceptable terms; and our
ability to maintain existing production levels and add production and reserves
through our development and exploitation activities. Although we believe 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 our 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:
competition for, among other things, capital, acquisitions of reserves,
resources, undeveloped lands and skilled personnel; 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; 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; changes in tax laws; changes in the Alberta royalty framework;
uncertainty of obtaining required approvals for dispositions, acquisitions and
mergers; our failure to close one or more asset disposition transactions on
the terms agreed to or at all; and the other factors described in our public
filings (including our 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, we do 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 statement.

     Penn West trust units and debentures are listed on the Toronto Stock
Exchange under the symbols PWT.UN, PWT.DB.B, PWT.DB.C, PWT.DB.D, PWT.DB.E and
PWT.DB.F and Penn West trust units are listed on the New York Stock Exchange
under the symbol PWE.

     %SEDAR: 00022266E
     %CIK: 0001334388
For further information: PENN WEST ENERGY TRUST, Suite 200, 207 - 9th Avenue
S.W., Calgary, Alberta, T2P 1K3, Phone: (403) 777-2500, Fax: (403) 777-2699,
Toll Free: 1-866-693-2707, Website:; Investor Relations: Toll
Free: 1-888-770-2633, E-mail:; William
Andrew, CEO, Phone: (403) 777-2502, E-mail:; Jason
Fleury, Manager, Investor Relations, Phone: (403) 539-6343, E-mail:

. <
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Penn West Energy Trust

ISIN : CA7078871059
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Penn West Energy Trust is a and oil producing company based in Canada.

Penn West Energy Trust holds various exploration projects in Canada.

Its main exploration property is SWAN HILLS in Canada.

Penn West Energy Trust is listed in United States of America. Its market capitalisation is US$ 80.7 millions as of today (€ 73.8 millions).

Its stock quote reached its highest recent level on May 29, 2009 at US$ 9.98, and its lowest recent point on April 01, 2020 at US$ 0.15.

Penn West Energy Trust has 504 340 988 shares outstanding.

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11/18/2008confirms its November cash distribution
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