On September 23, 2010, Cordova Gas Resources Ltd., an indirect subsidiary of Mitsubishi Corporation completed the formation of an unincorporated joint venture with Penn West Petroleum Ltd. in relation to the development of conventional and shale gas properties in British Columbia.
As part of the agreement, Mitsubishi acquired a 50 percent interest in the joint venture consisting of current production of approximately 30 million cubic feet per day (gross) of conventional natural gas, 550,000 acres (gross) of land including approximately 120,000 acres (gross) targeting shale gas in the Cordova Embayment, as well as a 50 percent 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 $250 million in initial consideration and Mitsubishi has committed to spend $600 million of the first $800 million of initial development capital associated with the joint venture.
Mitsubishi Corporation is Japan's largest general trading company with over 200 bases of operations in approximately 80 countries worldwide. Penn West is one of the largest conventional oil and natural gas producers in North America and the largest producer of light and medium oil in western Canada.
Mitsubishi was represented in-house by a team led by Benjamin Milsom, and by Bennett Jones LLP with a team led by Patrick Maguire (energy); Darcy Moch (tax); Donald Greenfield (energy, competition and Investment Canada) and Lyle Guard, Kieran Ryan and Duncan McPherson (energy).
Penn West Petroleum Ltd. was represented in-house by a team that included Keith Luft and Kristen Lewicki, and by Craig Spurn (energy); Edmund Gill (tax) and John Eamon (securities) of Venn Law LLP and Peter Glossop (competition, Investment Canada) of Osler, Hoskin & Harcourt LLP.