May 1 (Bloomberg) -- Athabasca Oil Corp., the Canadian crude producer selling an oil-sands asset to PetroChina Co., will use the funds to speed up shale drilling as it looks to diversify from bitumen production following project delays.
The Calgary-based company will seek a partner to drill wells in the 200,000 acres it controls in northwestern Alberta’s Duvernay formation, a field that may be similar to Texas’s Eagle Ford in shale-oil quality, Chief Executive Sveinung Svarte said in an interview. He declined to comment on possible partners.
“Duvernay for us is, in Canada, probably one of the most promising plays,” Svarte said by phone. “We think it’s very comparable to the Eagle Ford in the U.S. in terms of quality.”
Athabasca is selling its 40 percent stake in the Dover oil-sands venture for C$1.3 billion ($1.2 billion) to partner PetroChina through a put option after ending a legal battle with the Fort McKay First Nation that delayed the project and the deal. Its shares have gained 26 percent in Toronto this year, rebounding from a 45 percent slump that made it the worst performer among Canadian oil producers worth more than C$3 billion in 2013.
Athabasca, which changed its name from Athabasca Oil Sands Corp. in May 2012, will receive the proceeds from the put option this quarter and plans a “big development program” for the Duvernay shale prospect, Svarte said. Some of the funds will be kept “up our sleeves” to be used on other projects in the future, he said.
The company, worth about C$3.3 billion, produced 6,397 barrels of oil equivalent a day in 2013.