Athabasca Oil Corp. will make a C$49 million ($45 million) payment to PetroChina Co., lowering the purchase price of the Dover oil-sands project in a bid to help complete the deal.
The payment will address claims by PetroChina for future abandonment costs for oil and natural gas wells and will be contingent on the completion of the put option, the Calgary-based company said today in a statement. Not including the payment, the net value of the put option is now C$1.23 billion.
Athabasca and PetroChina are working to reach an agreement and expect a conclusion in the “near future,” Chief Executive Officer Sveinung Svarte, said during a conference call today, without providing a deadline. “We are committed to closing the Dover deal.”
Athabasca has declined 28 percent since Feb. 21 when the company announced it had reached an agreement with an Alberta aboriginal group, paving the way to complete the deal with PetroChina. A put option exercised by Athabasca on April 17 forces a PetroChina subsidiary to buy the 40 percent it doesn’t own in the undeveloped Dover oil-sands project in northeastern Alberta, based on a 2010 agreement.
The Dover project contains reserves of 4.1 billion barrels at a 50 percent recovery rate, Alberta’s energy regulator said in August. Athabasca expects production at the site to reach 250,000 barrels a day at full capacity.
Athabasca rose 2.5 percent to C$6.27 at 10:15 a.m. in Toronto.