​Statoil exits the oilsands with up to $832 million SAGD sale to Athabasca Oil Corporation

Image: Statoil

The Leismer SAGD project has returned to the hands of a Canadian oilsands producer.

Athabasca Oil Corporation announced Wednesday that is acquiring the producing project and associated infrastructure, as well as the proposed Corner SAGD project, from Statoil for $582 million plus payments based on the price oil to 2020 that could total $832 million.

The deal adds a second producing SAGD project to Athabasca’s portfolio. The company started production from its 12,000 bbl/d capacity Hangingstone project in July 2015.

Leismer, which started operating in 2010, was part of a package of assets that Statoil acquired through its $2.2-billion purchase of junior North American Oil Sands in 2007. That package included Corner, as well as proposed SAGD projects at Thornbury, Hangingstone and South Leismer, but Statoil divested of the latter three projects to former asset partner PTTEP in 2014.

For Athabasca, which is also active in the Montney and Duvernay light oil plays, the transaction is “transformational,” adding about 24,000 bbls/d to the company’s volumes of 11,848 boe/d in the third quarter.

Athabasca says the transaction will immediately drive a larger cash flow base and accelerate its transition to sustainable free cash flow generation, which is expected in early 2018 at US$60/bbl WTI.

For Statoil, the move withdraws it from its position in the oilsands, which the company has acknowledged has been more challenging than it had anticipated on costs and climate concerns for Norway’s state-owned producer.

“If we knew then what we know now, I don’t think we would have gone into the [oilsands] project,” Statoil director of strategic planning John Knight said in an interview with Oslo-based newspaper Dagens Næringsliv last year.

In a statement issued by Athabasca, Statoil Canada president Paul Fulton said “the transaction allows Statoil to redeploy proceeds to our global portfolio of opportunities. We firmly believe Athabasca is very well placed to continue the development of these assets."

The deal also gives the now-intermediate level Canadian producer the regulatory approvals that are place for Leismer and Corner, which could take future phases to a combined 80,000 bbls/d.

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