Penn West Energy Trust (TSE:PWT-UN)(NYSE:PWE) has entered into a deal with China Investment Corp for $805 million, the second major deal in a year by the sovereign wealth fund from China for a Canadian company. Last year CIC took a 17.2 stake in Teck Resources (TSE:TCK-b), a major Canadian mining company.
Terms of the deal are China Investment will pay C$312 million up-front, and the another C$505 million for development of the oil sands project.
Penn West Energy is selling 45 percent of their stake to CIC in order to gain access to the cash they needed.
Penn's major contribution is the land they own in the oil sands region, which they'll use the cash to develop.
CIC wil also take a 5 percent stake in Penn West for C$435 million.
Assets held by Penn West in the oil sands is 237,000 acres.
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