Calgary-based Athabasca Oil Corp. (TSX:ATH) has struck a deal to buy the northern Alberta oilsands assets of Norwegian oil giant Statoil ASA for up to $832 million.
The surprise sale agreement announced Wednesday includes Statoil’s six-year-old Leismer thermal oilsands project, which uses steam to produce 24,000 barrels per day of bitumen from wells, and its proposed Corner oilsands project, plus associated infrastructure.
“This transaction corresponds with Statoil’s strategy of portfolio optimization to enhance financial flexibility and focus capital on core activities globally, including offshore Newfoundland,” said Lars Christian Bacher, Statoil’s executive vice-president for international development and a former president of its Canadian branch, in a statement.
Statoil said Athabasca has agreed to pay $435 million in cash plus issue 100 million Athabasca shares worth about $147 million. The share issue will give Statoil a stake of just under 20 per cent in Athabasca, which it said would be treated as an investment.
Up to $250 million more is to be paid in a series of contingent payments triggered if West Texas Intermediate oil prices rise above US$65 per barrel. They closed Wednesday at US$51.04.
Current Statoil Canada president Paul Fulton said in an interview that 220 of its 319 Calgary employees are connected with the oilsands operations. Most are expected to be offered work with Athabasca, but some will likely lose their jobs.
He said Statoil will continue to maintain its Canadian headquarters in Calgary and the remaining staff will work on its East Coast portfolio.
Statoil produces about 20,000 bpd of oil from three offshore fields near Newfoundland operated by partners, Fulton said.
In a separate news release, Athabasca said the deal will establish it as an intermediate growth company with a production base of about 40,000 barrels of oil equivalent per day when it closes early in 2017, delivering cash flow to be used to speed development of light oil assets focused on the Montney and Duvernay formations in Alberta.
“This transaction is transformational for Athabasca and establishes scale with top-tier thermal assets and people,” said Athabasca CEO Rob Broen. “We are pleased to have Statoil, a global energy leader, as an investor in the company.”
Earlier this year, Athabasca formed a $475-million joint venture with U.S.-based Murphy Oil Company to share costs of its Montney and Duvernay developments.
Statoil entered the Alberta oilsands by buying North American Oil Sands Corp. in 2007.
In 2014, it put the proposed 44,000-bpd Corner project on hold for at least three years, citing high costs.
Statoil said the sale will trigger a balance sheet impairment of US$500 million to $550 million.
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