Penn West is Now the Biggest

Article Excerpt

PENN WEST ENERGY TRUST $30.12 (Toronto symbol PWT.UN; SI Rating: Speculative) has agreed to acquire TSX-listed Canetic Resources Trust for $3.8 billion in Penn West units. The acquisition will make Penn West the largest conventional oil and gas trust in North America, with average daily production of over 200,000 barrels of oil equivalent (weighted 42% to natural gas and 58% to oil). Penn West currently has average daily output of around 127,000 barrels per day. Canetic adds conventional oil and gas production, as well as high-cost but high potential oil sands, coalbed methane and shale gas projects. Penn West plans to continue to pay its $0.34 a month distribution after it completes the purchase. It expects to distribute just 67% to 72% of its cash flow to its investors in 2008. In September, 2007, Penn West also agreed to buy TSX-listed Vault Energy for approximately $380 million in Penn West units. The acquisition added 6,500 barrels of oil equivalent per day to the company’s…