Athabasca Falls as $1.23 Billion Funds Seen Delayed

Athabasca Oil Corp., the oil-sands developer in a partnership with PetroChina Co., fell to the lowest since January as it awaits a C$1.32 billion ($1.23 billion) payment from the Chinese company expected last month.

The Calgary-based company fell 2 percent to C$6.87 at the close in Toronto, after earlier sliding to the lowest intraday price since Jan. 16. It’s the seventh straight day of losses for Athabasca, the longest streak since March 2013, according to data compiled by Bloomberg.

Athabasca depends on the payment from Beijing-based PetroChina to fund drilling, including in the Duvernay shale in Alberta where it’s seeking partners. Athabasca Chief Executive Officer Sveinung Svarte said on a May 7 call that he anticipated the funds late in the second quarter, or before June 30.

The stock is weak on a “continual delay” in the payment from PetroChina, Eric Nuttall, who oversees an energy fund at Sprott Asset Management LP in Toronto, said in a phone interview today. The fund doesn’t own Athabasca shares. “That and the joint venture on their Duvernay acreage keeps getting deferred.”

A put option exercised by Athabasca on April 17 forces PetroChina to buy the 40 percent it doesn’t own in the undeveloped Dover oil-sands project from the Canadian company, based on a 2010 agreement. In a similar agreement, it took Athabasca 10 weeks to get paid after triggering a put option in 2012 that forced the Chinese company buy the rest of the Mackay River oil-sands project.

No Timeframe

“We continue to work with our partner here to achieve closing of the Dover put,” Matthew Taylor, a spokesman for Athabasca, said in a July 9 phone interview. “There’s no defined time period within the put/call agreement. It’s a reasonable time frame.”

He repeated that today and said the company will update the market when there is a material development.

Chen Shudong, president of the Canadian office for PetroChina’s parent China National Petroleum Corp. and president of the Dover joint venture company Brion Energy Corp., didn’t immediately return phone and e-mail messages seeking comment on the put. Mao Zefeng, a Beijing-based spokesman for PetroChina, didn’t immediately respond to a phone call to his office or e-mail outside of normal business hours.

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