Penn West Energy to Acquire Vault Energy Trust

Penn West Energy Trust has agreed to acquire all outstanding units, exchangeable shares, and warrants of Vault Energy Trust. Penn West is an oil and natural gas energy trust based in Calgary, Alberta.

The agreement states that each Vault trust unit will be exchanged for 0.14 of each Penn West trust unit. Also, all Vault exchangeable shares will be exchanged for Penn West trust units based on the exchange ratio for Vault units on the Arrangement effective date.

The transaction exchange ratio represents a premium to Vault Unitholders of 6%. This percentage is based on the unit trading price for the ten trading days up to September 24, 2007. The total acquisition cost is expected to be approximately $380 million, including Vault’s estimated total debt. Approximately 5.5 million Penn West trust units are expected to be issued in 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 at year-end. Penn West's tax pool position is estimated to increase by approximately $500 million and increase its ceiling to approximately $10.4 billion.

Vault's Alberta properties include Wimborne, Bigoray, Pembina, Crystal and Westerose, located at or near Penn West's light oil properties. Vault's natural gas properties in northeast British Columbia and northwest Alberta complement Penn West properties. Penn West will add approximately 120,000 undeveloped acres to its land base of approximately 3.5 million acres.

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, regulatory and courts. A mailing to Vault unitholders is planned in October 2007, with a special Vault unitholder meeting called for in November 2007. If the Arrangement closes in December 2007, Vault unitholders should receive Penn West's distribution on January 15, 2008. At the close of the Arrangement, according to the terms of Vault's convertible debt, Penn West will offer to re-purchase all of Vault's outstanding debt.

The Board of both Penn and Vault unanimously approved 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.

Scotia Capital Inc. is financial advisor to Vault and has advised the Board that they believe that the agreement is fair from a legal and financial point of view.