Grease and flour a 12"x18" sheet cake pan, and preheat oven to 350 degrees F.
In a saucepan, bring the water, oil, butter, and peanut butter to a boil.
Meanwhile, mix together flour, sugar, baking soda, and salt in a large mixing bowl. After the butter mixture comes to a boil, pour over dry ingredients and mix well. Once combined, add eggs, buttermilk, and vanilla. Mix well.
Pour in prepared pan, and bake at 350 for 15 to 18 minutes.
While cake is baking, prepare the frosting. Bring the frosting ingredients (except powdered sugar) to a boil on the stove top. Pour over powdered sugar and beat until smooth. Add extra milk a tablespoon at a time if the frosting is too thick. Pour on warm cake and spread until smooth. Let the cake cool, then slice and serve.