Athabasca Finalizes Acquisition of Excelsior Energy
November 09 2010 - 7:57PM
PR Newswire (Canada)
CALGARY, Nov. 9 /CNW/ -- CALGARY, Nov. 9 /CNW/ - Athabasca Oil
Sands Corp. (TSX: ATH) announces it has completed the
previously announced acquisition of Excelsior Energy Limited (TSXV:
ELE) pursuant to a plan of arrangement that became effective
earlier today. Excelsior's security holders voted this
morning by a 99.9% majority to approve the arrangement and the
court sanctioned the arrangement this afternoon. Athabasca expects
to make an application to the TSX Venture Exchange to de-list the
Excelsior common shares from the TSX-V shortly. Sveinung Svarte,
Athabasca's president and CEO is pleased the acquisition has been
completed. "With this acquisition, we acquired Excelsior's
oil sands acreage at Hangingstone and West Surmont plus its in situ
combustion technology. This deal will likely enable us to
accelerate development of the Hangingstone area. "We are also
very pleased to see the massive support from Excelsior's security
holders with only 0.1% voting against this plan of arrangement,"
Svarte adds. "Most of them preferred Athabasca shares rather
than cash. We see that as a strong vote of confidence for the
company and we are happy to welcome them as new shareholders."
Athabasca intends to file an application with Alberta Environment
and the Energy Resources Conservation Board (ERCB) in 2011 seeking
approvals for an up to 2,000 cubic metres per day (approximately
12, 000 barrels/day) steam assisted gravity drainage (SAGD) pilot
in Hangingstone. Once approvals are granted, it plans
to build surface facilities capable of steaming production areas on
the combined acreage. SAGD involves drilling pairs of
horizontal wells into the oil-bearing formation, injecting steam
into the upper wells (to reduce the viscosity of the bitumen) and
collecting the heavy oil in the lower well so it can flow to
surface. Dr. David Winter, former president and CEO of
Excelsior, believes the transaction is good for Excelsior's
security holders. "Athabasca offered our investors the choice
of either a cash deal or the ability to exchange their shares and
warrants for Athabasca shares or warrants. The vast majority
elected to become Athabasca shareholders. Their resources are
well-known, well-defined and well-explored. They have a
strong track record of creating value for their investors."
According to Bill Gallacher, Athabasca's chair of the board, there
continues to be an impressive interest in oil sands and predicts
further mergers and acquisitions as the Canadian economy
recovers. "It's good to see a Canadian company buy another
Canadian organization. Athabasca's asset base of
approximately 8.705 billion barrels, which is comprised of 8.591
billion barrels of contingent resource (best estimate) and 114
million barrels of probable reserves, and strong financial position
with $1.9 billion in net working capital, gives it the ability to
continue to make strategic purchases." Athabasca is a dynamic oil
sands company formed to develop and produce bitumen in the
Athabasca region of northeastern Alberta. It was incorporated
in 2006 with a goal to use the latest technology to produce bitumen
in a sound, progressive and safe manner. The company's shares
are traded on the Toronto Stock Exchange under the trading symbol
ATH. It has a current market capitalization of $4.8 billion.
Reader Advisory This News Release contains forward-looking
information that involves various risks, uncertainties and other
factors. All statements other than statements of historical fact
are forward-looking statements. The use of any of the words
"anticipate", "plan", "continue", "estimate", "expect", "may",
"will", "project", "should", "believe", "predict", "pursue" and
"potential" and similar expressions are intended to identify
forward-looking statements. The forward-looking information is not
historical fact, but rather is based on AOSC's current plans,
objectives, goals, strategies, estimates, assumptions and
projections about AOSC's industry, business and future financial
results. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements. No assurance can be given that these
expectations will prove to be correct and such forward-looking
statements included in this News Release should not be unduly
relied upon. These statements speak only as of the date of this
News Release. In particular, this News Release may contain
forward-looking statements pertaining to the following: AOSC's
capital expenditure programs; the estimated quantity of AOSC's
Probable and Possible Reserves and Contingent Resources; AOSC's
drilling plans; AOSC's plans for, and results of, exploration and
development activities; AOSC's plans with respect to the Birch and
Grosmont assets; timing of completion of the Excelsior transaction,
AOSC's plans with respect to the assets to be acquired from
Excelsior including the timing for submission of the application
for and receipt of pilot project approval and the expected benefits
to be received by AOSC from such assets; the pro-forma effect of
the Excelsior transaction on AOSC's resources and undeveloped land
position; and the timing for receipt of regulatory approvals. With
respect to forward-looking statements and forward-looking
information contained in this News Release, assumptions have been
made regarding, among other things: AOSC's ability to obtain
qualified staff and equipment in a timely and cost-efficient
manner; the regulatory framework governing royalties, taxes and
environmental matters in the jurisdictions in which AOSC conducts
and will conduct its business; the applicability of technologies
for the recovery and production of AOSC's reserves and resources;
future capital expenditures to be made by AOSC; future sources of
funding for AOSC's capital programs; AOSC's future debt levels;
geological and engineering estimates in respect of AOSC's reserves
and resources; the geography of the areas in which AOSC is
conducting exploration and development activities; and AOSC's
ability to obtain financing on acceptable terms. Actual results
could differ materially from those anticipated in these
forward-looking statements as a result of the risk factors set
forth above and under the headings "Notice to Investors
-Forward-Looking Statements" and "Risk Factors" in the Company's
prospectus dated March 30, 2010, which is available on the SEDAR
website at www.sedar.com ("Prospectus"), including: fluctuations in
market prices for crude oil and bitumen blend; general economic,
market and business conditions; dependence on the PetroChina
subsidiary as the joint venture participant in the MacKay River and
Dover oil sands projects; variations in foreign exchange and
interest rates; factors affecting potential profitability; the
global financial crisis; uncertainties inherent in estimating
quantities of reserves and resources; AOSC's status and stage of
development; uncertainties inherent in Steam Assisted Gravity
Drainage ("SAGD"), Cyclic Steam Stimulation ("CSS") and other
bitumen recovery processes; the potential for adverse consequences
in the event that AOSC defaults under certain of the PetroChina
Transaction Agreements (as defined in the Prospectus);
environmental risks and hazards and the cost of compliance with
environmental regulations, including greenhouse gas regulations and
potential Canadian and U.S. climate change legislation; failure to
obtain or retain key personnel; the substantial capital
requirements of AOSC's projects; the need to obtain regulatory
approvals and maintain compliance with regulatory requirements;
extent of, and cost of compliance with, government laws and
regulations and the effect of changes in such laws and regulations
from time to time; changes to royalty regimes; political risks;
failure to accurately estimate abandonment and reclamation costs;
risks inherent in AOSC's operations, including those related to
exploration, development and production of oil sands reserves and
resources, including the production of oil sands reserves and
resources using SAGD, CSS or other in-situ technologies; the
potential for management estimates and assumptions to be
inaccurate; long term reliance on third parties; reliance on third
party infrastructure for project facilities; failure by
counterparties to make payments or perform their operational or
other obligations to AOSC in compliance with the terms of
contractual arrangements between AOSC and such counterparties and
the possible consequences thereof; the potential lack of available
drilling equipment and limitations on access to AOSC's assets;
aboriginal claims; seasonality; hedging risks; risks associated
with establishing and maintaining systems of internal controls;
insurance risks; claims made in respect of AOSC's operations,
properties or assets; the potential for adverse consequences as a
result of the change of control provisions in the PetroChina
Transaction Agreements; competition for, among other things,
capital, the acquisition of reserves and resources, export pipeline
capacity and skilled personnel; the failure of AOSC or the holder
of certain licenses or leases to meet specific requirements of such
licenses or leases; risks arising from future acquisition
activities; risks relating to the reliance on financial
information, including that financial information does not reflect
the added costs that AOSC expects to incur as a public entity;
volatility in the market price of the common shares; the effect
that the issuance of additional securities by AOSC could have on
the market price of the common shares; incorrect assessment of the
value of the Excelsior transaction; failure to realize the
anticipated benefits of the Excelsior transaction; and risks
relating to AOSC's dividend policy. In addition, information and
statements in this News Release relating to "reserves" and
"resources" are deemed to be forward-looking information and
statements, as they involve the implied assessment, based on
certain estimates and assumptions, that the reserves and resources
described exist in the quantities predicted or estimated, and that
the reserves and resources described can be profitably produced in
the future. The assumptions relating to AOSC's reserves and
resources are contained in the reports of GLJ Petroleum Consultants
Ltd. dated effective April 30, 2010 and DeGolyer and MacNaughton
Canada Limited dated effective April 30, 2010. The risks and
uncertainties referred to above are described in more detail in
AOSC's prospectus dated March 30, 2010 and in AOSC's Statement of
Oil and Gas Reserves Data and Other Oil and Gas Information for the
Year Ended December 31, 2009, each of which is available on the
SEDAR website at www.sedar.com. See also AOSC's press release
issued on June 9, 2010 and its material change report dated June
18, 2010. Readers are cautioned that the foregoing list of
risk factors should not be construed as exhaustive. The
forward-looking statements included in this News Release are
expressly qualified by this cautionary statement. AOSC does not
undertake any obligation to publicly update or revise any
forward-looking statements except as required by applicable
securities laws. pHeather Douglasbr/ Vice President, Communications
& External Affairsbr/ (403) 532-7408br/ a
href="mailto:hdouglas@aosc.com"hdouglas@aosc.com/a/p
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