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In a statement, chairman of AOSC, Bill Gallacher said, "Oil sands projects are very capital-intensive long-term investments and difficult to fully finance in the traditional equity market. AOSC therefore decided to look for joint venture partners, and these strategic joint venture arrangements with PetroChina, one of the world's largest energy companies, can ensure that the MacKay River and Dover projects will be developed in timely manner, which is excellent news for Alberta and the rest of Canada."
Calgary, Alberta-based AOSC is a privately held oil sands company focused on the sustainable development of oil sands resources in the Athabasca region of northern Alberta, Canada. AOSC is one of the largest lease holders in the Athabasca region with net working interest in over 1.3 million acres, with leases located within 15 to 30 kilometers from other major oil sands projects and players.
AOSC is the operator of more than 1.7 million acres of oil sands leases. AOSC also owns a 50% stake and operatorship in a major joint venture covering about 750,000 acres of land on trend with the lands of Royal Dutch Shell (RDS-A, RDS-B, RDSA.L) in the western parts of the Athabasca region. AOSC contingent recoverable resources according to the 2008 independent third party evaluation is between about 6.9 billion barrels and 10.9 billion barrels, sufficient to support considerably greater than 500,000 barrels per day of production.
AOSC is currently transforming from an appraisal stage company to a development stage company. Two pilot applications have already been filed for the MacKay River and Dover areas and the first approval is expected mid-2009. Further, AOCS intends to file first commercial development regulatory application for MacKay River commercial project later this year for a 35,000 barrels per day project, which could hit commercial production in 2014, costing about C$1.1 billion.
AOSC's current joint venture projects with PetroChina involving the MacKay River and Dover oil sands projects, are located in the center of the Athabasca area in northeastern Alberta, an oil-rich province in western Canada, and have been independently assessed to contain a maximum of about 5 billion barrels of contingent bitumen resource. Under the joint venture, AOSC and PetroChina intend to use common in-situ methods to develop the oil sands projects. The joint venture agreements also provide for certain financing arrangements for Athabasca.
"Their field developments, operational methods, heavy-oil experience and research facilities are world class, and as a partner they will bring these very valuable attributes to the MacKay River and Dover projects in Alberta," Gallacher added.
On Friday, PetroChina reportedly agreed to purchase combined assets worth US$3.2 billion from the state-owned parent China National Petroleum Corp. or CNPC, China's biggest listed oil company by capacity, in a bid to increase its production process. PetroChina would buy CNPC's share in a production sharing contract on a gas field in Turkmenistan for US$1.19 billion, 10 of CNPC's petrochemical refineries in China for US$1.62 billion, and a domestic oil and gas producer, also from CNPC, for US$412.4 million.
PTR closed Monday's regular trading session at $109.75, down $3.44 or 3.04% on a volume of 0.45 million shares, lower than the three-month average volume of 0.56 million shares. In the past 52-week period, the stock has been trading in a range of $56.30 to $129.60.
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