Currently the cdn. oil sands is off the radar, low oil prices and high production costs have killed most projects, and even Suncor is at close to break even.
Cdn. Natural Horizen project is losing money at these prices, need prices of $55-$60. maybe $50 they are good operators.
Still Total is putting bidding 617 million cnd. on UTS (1.30 a share) uts closed at .83. high 6.28 low .67
the deal is condional on getting 66.67%, UTS is a jr. that owns 20% of a large oil sands projects.
Petro Canada own 60% and TCK.B (TCK) owns the other 20%.
a producution descison is suposed to come in 2010 for 2013 but all of that may be pushed back.
so why bid over $600 million for 20% of a project that cost is over $80 a barrel.
1. not easy to find large amount of reserves. this will add roughly 2.1 billon barrels.
2. may be able to buy out the other partners. 20% TCK will need cash if met coal does not recover quickly.
3. Petro Canada may also sell, or offer a competing bid for UTS, TCK is more likely a seller in the future.
4. Total has other cdn. oil sand assets, so they know the investment and risks.
5. considering 85-90% of all oil is controlled by naitonal governments or companies acting on their behalf....very hard to find 2 billion barrels of oil.
this is a 600 million gamble that oil prices recover sometime in the future....my main surprise is why other large cap oils are not in the bidding game...like Exxon...sorry meant to say oil companies.
thanks
selkirk
Cdn. Natural Horizen project is losing money at these prices, need prices of $55-$60. maybe $50 they are good operators.
Still Total is putting bidding 617 million cnd. on UTS (1.30 a share) uts closed at .83. high 6.28 low .67
the deal is condional on getting 66.67%, UTS is a jr. that owns 20% of a large oil sands projects.
Petro Canada own 60% and TCK.B (TCK) owns the other 20%.
a producution descison is suposed to come in 2010 for 2013 but all of that may be pushed back.
so why bid over $600 million for 20% of a project that cost is over $80 a barrel.
1. not easy to find large amount of reserves. this will add roughly 2.1 billon barrels.
2. may be able to buy out the other partners. 20% TCK will need cash if met coal does not recover quickly.
3. Petro Canada may also sell, or offer a competing bid for UTS, TCK is more likely a seller in the future.
4. Total has other cdn. oil sand assets, so they know the investment and risks.
5. considering 85-90% of all oil is controlled by naitonal governments or companies acting on their behalf....very hard to find 2 billion barrels of oil.
this is a 600 million gamble that oil prices recover sometime in the future....my main surprise is why other large cap oils are not in the bidding game...like Exxon...sorry meant to say oil companies.
thanks
selkirk
