Athabasca Oil Sands Corp., a Canadian crude producer, will sell its remaining interest in the MacKay River oil-sands project to a PetroChina Co. division for C$680 million ($674 million).
Athabasca exercised a put option to sell the 40 percent stake in the project to Cretaceous Oilsands Holdings Ltd. and will repay two loans to the PetroChina unit, the Calgary-based company said in a statement today. The divestiture will reduce Athabasca’s 2012 capital budget by C$190 million.
The deal gives Cretaceous 100 percent control over the project in northern Alberta. Athabasca said it will focus on other developments in its 10 billion-barrel reserve portfolio.
“Our strategy is to ultimately achieve approximately 50 percent of our production from the company’s oil sands division and the balance from the light oil division,” Chairman Bill Gallacher, said in the statement. “We will use the proceeds from the option exercise to implement this strategy.”
Athabasca rose 1 percent to close at C$12.61 in Toronto.
The MacKay River project will eventually produce as much as 150,000 barrels a day using a technology called steam-assisted gravity drainage. The process melts bitumen, a tar-like fossil fuel, underground and allows it to flow into pipes. Athabasca sold a 60 percent stake in the MacKay River to PetroChina in 2009.