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Penn West Exploration Announces Its Financial Results For The Fourth Quarter Ended December 31, 2012 And 2012 Year-end Reserve Results

d)  Net present value of future net revenue using forecast prices and costs (millions) at December 31, 2012

                                 Net present value of future net revenue before income taxes
                                                                              (discounted @)
    Reserve Category
    (1)                           0%            5%           10%           15%           20%

    Proved
         Developed
         producing          $ 10,179      $  7,151      $  5,603      $  4,659      $  4,017
         Developed
         non-producing           312           220           167           134           112
         Undeveloped           2,896         1,620           942           541           284
         Total proved       $ 13,387      $  8,990      $  6,713      $  5,334      $  4,413
    Probable                   8,031         4,033         2,417         1,604         1,133
    Total proved plus
    probable                $ 21,419      $ 13,023      $  9,130      $  6,937      $  5,546
    (1) Columns may not add due to rounding.

Net present values take into account wellbore abandonment liabilities and are based on the price assumptions that are contained in the following table. It should not be assumed that the estimated future net revenues represent fair market value of the reserves. There is no assurance that the forecast price and cost assumptions will be attained and variances could be material.

e)  Summary of pricing and inflation rate assumptions using forecast prices and costs as of December 31, 2012

                                                        Oil
                                      Lloyd-            Natural                    Exchange
                    WTI  Edmonton   minster    Cromer       gas                       rate
                Cushing,      Par     Blend    Medium  AECO gas  Edmonton Inflation   (US$
               Oklahoma   40o API   21o API   29o API     price   propane     rate  equals
    Year       ($US/bbl)($CAD/bbl)($CAD/bbl)($CAD/bbl)($CAD/mcf)($CAD/bbl)     (%)  $1 CAD)

    Historical
    2008          98.05    101.82     82.59     93.40      8.16     58.31      1.7    0.94
    2009          61.60     66.32     58.39     62.98      4.20     37.99      0.3    0.88
    2010          79.42     78.02     66.79     73.81      4.17     46.87      1.8    0.97
    2011          94.83     95.15     76.37     87.57      3.68     53.47      3.0    1.01
    2012          94.15     86.70     73.05     81.26      2.44     38.18      1.5    1.00
    Forecast
    2013          89.82     84.78     69.63     78.84      3.35     40.61      1.8    1.00
    2014          91.21     90.67     75.26     83.42      3.78     47.98      1.8    1.00
    2015          91.64     91.10     75.62     83.81      4.09     52.93      1.8    1.00
    2016          96.51     95.97     80.13     88.77      4.71     55.86      1.8    1.00
    2017          97.23     96.68     80.73     89.43      5.13     56.43      1.8    1.00
    2018          97.95     97.41     81.34     90.11      5.31     56.82      1.8    1.00
    2019          99.21     98.67     82.39     91.27      5.40     57.52      1.8    1.00
    2020         100.95    100.40     83.84     92.88      5.50     58.51      1.8    1.00
    2021         102.71    102.17     85.31     94.51      5.60     59.51      1.8    1.00
    2022         104.51    103.96     86.81     96.16      5.70     60.54      1.8    1.00
    Thereafter
    escalating at  1.8%      1.8%      1.8%      1.8%      1.8%      1.8%        -       -

f) Finding and development costs ("F&D costs")

                                                        Year ended December 31
                                        2012     2011     2010  3-Year average

    Adjusted F&D costs including
    Future Development Costs
    ("FDC") (1)
                  F&D costs per boe
                  - proved plus
                  probable           $ 23.12  $ 23.96  $ 23.39       $   23.54
                  F&D costs per boe
                  - proved           $ 26.91  $ 31.69  $ 25.25       $   28.43

    F&D costs excluding FDC (2)
                  F&D costs per boe
                  - proved plus
                  probable           $ 17.48  $ 15.07  $ 18.90       $   16.76
                  F&D costs per boe
                  - proved           $ 26.69  $ 23.55  $ 21.50       $   24.02

    F&D costs including FDC (3)
                  F&D costs per boe
                  - proved plus
                  probable           $ 25.50  $ 26.79  $ 26.73       $   26.32
                  F&D costs per boe
                  - proved           $ 30.96  $ 37.05  $ 28.01       $   32.60
    (1) The calculation of adjusted F&D includes the change in FDC, excludes
        the effect of economic revisions related to downward revisions of
        natural gas prices.
    (2) The calculation of F&D excludes the change in FDC and excludes the
        effects of acquisitions and dispositions.
    (3) The calculation of F&D includes the change in FDC and excludes the
        effects of acquisitions and dispositions.

Capital expenditures for 2012 have been reduced by $137 million related to joint venture carried capital (2011 - $107 million). We use Adjusted F&D to assess the economic viability of our oil development programs. F&D costs are calculated in accordance with NI 51-101, which include the change in FDC, on a proved and proved plus probable basis. For comparative purposes we also disclose F&D costs excluding FDC.

The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year.

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