Penn West Energy Trust and Canetic Resources Trust have entered into an agreement that provides for the strategic combination of Penn West and Canetic, which the firms claim will form Canada's flagship energy trust.

According to the companies, the combination will form the largest conventional oil and gas trust in North America with an enterprise value of over C$15 billion and current production of over 200,000 barrels of oil equivalent (boe) per day.

The combined asset portfolio will include interests in a significant number of western Canada’s highest quality conventional oil and natural gas pools and will also include a number of non-conventional growth opportunities including oil sands, coalbed methane, shale gas and enhanced oil recovery.

At closing, the strategic merger of assets and people will operate under the Penn West name and will be led by a combined management team and board of directors. On completion of the combination, Penn West unit holders will own approximately 67% and Canetic unit holders will own approximately 33% of the combined trust.