Statoil exits Canadian oil sands operations
Norway-based Statoil has sold its entire Kai Kos Dehseh oil sands operations to Athabasca Oil Corporation for $832 million in cash and stock. The assets include the Leismer demonstration plant, the Corner project and all associated midstream assets for $450 million in cash and 100 million Athabasca Oil Corp shares. Athabasca will also pay up to $250 million in contingency if the price of oil rises above US$65 a barrel.
Statoil says the divestiture will help it focus its capital on core activities.
The Leismer SAGD operation has been operating since 2010 and currently produces about 24,000 bbl/day. The project has regulatory approvals in place for up to 40,000 bbl/day of production and currently reports a breakeven cost of US$44 WTI.
Statoil placed the adjacent Corner SAGD project on hold in 2014, citing falling low oil prices and outlook uncertainty. Corner already has regulatory approvals in place for 40,000 bbl/day of production.
Statoil purchased the Kai Kos Dehseh oil sands lease through its takeover of American Oil Sands in 2007. The company also runs a Heavy Oil Technology Centre in Calgary, employing about 60 staff.
Included in the transaction are dilbit and diluent lines from Leismer to Cheecham and 300,000 barrels of storage at the Cheecham and Edmonton terminals.
Statoil is not exiting Canada completely, however. The company owns several exploration leases offshore Newfoundland and is a partner in the Hibernia, Terra Nova and Hebron platforms. The company also warned it will take a US$500 to $550 million impairment charge on the oil sands divestiture.
The acquisition boosts bitumen production at Athabasca Oil Corp to a range of 31,500 to 34,500 bbl/day. The company's existing Hangingstone oil sands operations is expected to boost production from the current 8,500 bbl/day to 12,000 bbl/day in 2018.