Athbasca Wins Approval From Alberta for Dover Oil Sands

Athabasca Oil Corp. won approval from the Alberta regulator for its Dover oil-sands project with PetroChina Co., over objections from local aboriginal groups.

The project, now known as Brion Energy Corp., will be required to do “progressive reclamation” of land disturbed by the steam-assisted bitumen extraction, the Alberta Energy Regulator said today on its website. Ten conditions were applied to the project in order for it to proceed.

Athabasca can now go ahead with a sale of its stake in the project, worth about C$1.3 billion ($1.25 billion) to PetroChina, helping the Canadian oil producer move ahead with other projects. The shares have declined 29 percent this year, trailing the 3.6 percent gain for the S&P/TSX Energy Index, amid uncertainty over the project.

The regulator said the project won’t have a direct effect on the Moose Lake area, a traditional territory of the Fort McKay First Nation, which sought a 20-kilometer (12-mile) buffer zone free of development around two lakes the community uses for cultural activities. The Dover site is about 100 kilometers northwest of Fort McMurray.

The Moose Lake area will only be “minimally affected” by the oil sands project, the regulator said in its 40-page decision. The oil sands site contains reserves of 4.1 billion barrels at a 50 percent recovery rate, the regulator said.

Eleven analysts rate Athabasca a buy, four say hold and there are no sells on the stock, according to data compiled by Bloomberg. The 12-month average target price is C$11.71, compared with a closing price today of C$7.37.

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