Penn West Energy Trust and Endev Energy Inc.( Endev) have entered into an Arrangement Agreement whereby Penn West will acquire all of the outstanding shares of Endev.

The acquisition will be accomplished through a Plan of Arrangement wherein each Endev share will be exchanged for 0.041 of a Penn West trust unit. Including the assumption of Endev’s debt, the total acquisition cost is expected to be approximately $170 million.

Based on closing prices on May 20, 2008 this exchange ratio equates to a price of $1.41 per Endev share and represents an 18.5 percent premium to today’s closing market price. The Arrangement will provide Endev shareholders enhanced liquidity and ownership in a large, oil-weighted energy trust with stable distributions, strong growth prospects and the ability to accelerate the exploitation of Endev's prospect inventory. It is expected that approximately 3.9 million Penn West trust units will be issued to effect the Arrangement.

Completion of the Arrangement, which is anticipated to occur in mid to late July 2008, is subject to, among other things, the approval of at least 66 2/3 percent of the Endev shareholders who vote at a special meeting to be held in mid to late July 2008, and receipt of all necessary regulatory and stock exchange approvals. The Board of Directors of Endev has unanimously (except for the abstention of John Brussa who is a director of both Penn West and Endev) determined that the proposed Arrangement is in the best interests of and fair to Endev and its shareholders and recommends that Endev shareholders vote in favour of the Arrangement at the upcoming special meeting.

Each of the directors and officers of Endev has entered into a Support Agreement pursuant to which they have agreed to vote in favour of the Arrangement, subject to the terms of such agreements.

The transaction is expected to add current production of approximately 3,500 barrels of oil equivalent per day to Penn West's production base, with Endev's current production weighted approximately 78 percent to natural gas and 22 percent to light oil and natural gas liquids. Based upon the closing unit and share prices of Penn West and Endev on May 20, 2008, the arrangement yields a price of approximately $49,000 per flowing barrel of oil equivalent.

Tags: Endev Energy Inc.(, Penn West Energy Trust