Blog: Penn West Energy Trust and China Investment Corporation Announce Closing of Previously Announced JoiJune 1, 2010
Penn West Energy Trust is announcing the closing of the previously announced joint venture partnership (the "Partnership") with an affiliate of China Investment Corporation ("CIC"). The Partnership has been formed to develop Penn West's bitumen assets located in the Peace River area of northern Alberta (the "Assets"). Penn West contributed the Assets valued at approximately $1.8 billion to the Partnership and has retained a 55% interest in the Partnership. CIC has acquired a 45% interest in the Partnership by investing approximately $312 million in the Partnership (which has been paid to Penn West by the Partnership to satisfy outstanding indebtedness to Penn West) and committing to carry a portion of Penn West's share of the Partnership's future capital and operating expenses totalling approximately an additional $505 million. An affiliate of Penn West will serve as operator of the Assets.
Penn West also closed the previously announced private placement of 23,524,209 trust units of Penn West to an affiliate of CIC for proceeds of approximately $435 million.
Penn West will use the approximately $747 million of proceeds received for general corporate purposes.