Total E&P Canada Ltd completes acquisition of UTS Energy Corporation

abarrelfullabarrelfull wrote on 04 Oct 2010 06:56
Tags: canada investing oil-sands total

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Total E&P Canada Ltd. (“Total”), a Total SA subsidiary, announced today that it has completed the acquisition of all of the outstanding shares of UTS Energy Corporation (“UTS”) with its main asset, a 20 per cent interest in the Fort Hills mining project in the Athabasca region of Alberta.

Under the terms of the Plan of Arrangement, UTS has transferred its assets, other than its participation in the Fort Hills Energy Limited Partnership and certain other assets, to SilverBirch Energy Corporation, a newly formed company, the shares of which have been distributed to UTS’s shareholders.

“We are very pleased to finalize this acquisition and we believe that Total’s offer represents good and fair value for shareholders,” said Jean-Michel Gires, President and CEO of Total E&P Canada. “Today marks another positive step for Total as we develop our long-term, sustainable position in the Canadian oil sands. We look forward to working alongside Suncor and Teck, our partners on the Fort Hills Project.”

Total paid a cash amount of $3.08 Canadian dollars (CAD) per share to acquire UTS, representing a total cash consideration of approximately CAD $1.5 billion. Taking into account the cash held by UTS following the transaction (CAD $355 million, equivalent to CAD $0.73 per share) the net cost of the acquisition for Total amounts to approximately CAD $1.15 billion (i.e. CAD $2.35 per share).

The Fort Hills project is operated by Canada’s Suncor Energy Inc. with a 60 per cent interest, and the remaining 20 per cent interest is held by Teck Resources Ltd. The most recent estimates put Fort Hills’ resources at approximately 3.4 billion barrels of bitumen, which will be recovered through open-pit mining. The project will be developed in two phases. The first phase of approximately 160,000 barrels per day has already obtained the necessary administrative approvals to launch development in the near future.

Total E&P Canada Ltd completes acquisition of UTS Energy Corporation

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