Penn West Energy Trust has formed the joint venture with a wholly owned subsidiary of Mitsubishi to develop shale gas assets in the Cordova Embayment area and certain conventional gas assets in the Wildboy area of northeastern British Columbia, Canada.

As part of the agreement, Mitsubishi acquired a 50% interest in the JV consisting of current production of approximately 30 million cubic feet per day (gross) of conventional natural gas and 550,000 acres (gross) of land.

The interest acquired by Mitsubishi also includes an approximately 120,000 acres (gross) targeting shale gas in the Cordova Embayment, as well as a 50% interest in the Wildboy gas processing facility, the sales gas pipeline connecting the area to the TransCanada system in Alberta, and all associated infrastructure.

In return, Penn West received approximately $250m in initial consideration and Mitsubishi has committed to spend $600m of the first $800m of initial development capital associated with the JV.