CALGARY, Aug. 29, 2014 /CNW/ - Athabasca Oil Corporation (TSX: ATH) ("Athabasca" or "the Company")
announces that it has closed the sale of its 40% interest in the Dover
oil sands project to Phoenix Energy Holdings Limited ("Phoenix"), a
wholly owned subsidiary of PetroChina International Investment Limited,
for net proceeds of $1,184 million.
At closing, Athabasca received a cash payment of $600 million, in
addition to three interest bearing promissory notes (the "Promissory
Notes") issued by Phoenix for the remaining $584 million. The
Promissory Notes are unconditional and secured by irrevocable, standby
letters of credit issued by HSBC Bank Canada and mature as follows:
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on March 2, 2015 a cash payment of $300 million;
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on August 28, 2015 a cash payment of $150 million; and
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on August 29, 2016 a final cash payment of $134 million.
"Closing of the Dover transaction is an important milestone for
Athabasca and marks the beginning of a new chapter for our Company,"
says Sveinung Svarte, President and CEO. "We can now finalise our
business strategy which will be focused on profitable production and
reserve growth, cash flow growth, cost discipline and balance sheet
flexibility. We intend to provide a full strategic update in early
September including revised guidance and capital plans. The Company now
has ample liquidity to continue development of its Duvernay and
Hangingstone core assets and the timing of the cash payments under the
promissory notes is aligned with our capital spending plans over the
next couple of years."
About Athabasca Oil Corporation
Athabasca Oil Corporation is a Canadian energy company with a diverse
portfolio of thermal and light oil assets. Situated in Alberta's
Western Canadian Sedimentary Basin, the Company has amassed a
significant land base of extensive, high quality resources. Athabasca's
common shares trade on the TSX under the symbol "ATH". For more
information, visit www.atha.com.
Reader Advisory:
This News Release contains forward-looking information that involves
various risks, uncertainties and other factors. All information other
than statements of historical fact is forward-looking information. The
use of a words such as "will", "plan", "intend" and "continue" and
similar expressions are intended to identify forward-looking
information. The forward-looking information is not historical fact,
but rather is based on the Company's current plans, objectives, goals,
strategies, estimates, assumptions and projections about the Company's
industry, business and future financial results. This information
involves 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 information. No assurance can be
given that these expectations will prove to be correct and such
forward-looking information included in this News Release should not be
unduly relied upon. This information speaks only as of the date of this
News Release. In particular, this News Release may contain
forward-looking information pertaining to the following: the receipt of
proceeds from the Promissory Notes; the Company's expected need for and
allocation of capital; the Company's liquidity position; and the
Company's plans for and development activities with respect to the
Hangingstone and Duvernay assets.
With respect to forward-looking information contained in this News
Release, assumptions have been made regarding, among other things: the
receipt of the payment under the Promissory Notes in a timely manner;
the Company's capital spending plans over the next several years;
future sources of funding for the Company's capital programs; the
Company's future debt levels; the Company's ability to obtain financing
and/or enter into joint venture arrangements, on acceptable terms; and
the impact that the timing of the Company's receipt of payments made by
Phoenix under the Promissory Notes will have on the Company, including
on the Company's financial condition, capital programs and results of
operations.
Actual results could differ materially from those anticipated in this
forward-looking information as a result of the risk factors set forth
in the Company's most recent Annual Information Form ("AIF") dated
March 18 2014, available on SEDAR at www.sedar.com, including, but not
limited to: the substantial capital requirements of Athabasca's
projects and the ability to obtain financing for Athabasca's capital
requirements; the potential for adverse consequences in the event that
the Company is unable to collect any or all of the amounts owing to it
under the Promissory Notes; general economic, market and business
conditions in Canada, the United States and globally; including risks
affecting the ability of HSBC Bank Canada to honour obligations under
the irrevocable letters of credit issued by it to secure the Promissory
Notes; the potential for management estimates and assumptions to be
inaccurate; competition for, among other things, capital; failure to
satisfy certain conditions in connection with the Company's debt and
credit facilities; and risks pertaining to the Company's debt and
credit facilities.
The forward-looking statements included in this News Release are
expressly qualified by this cautionary statement. Athabasca does not
undertake any obligation to publicly update or revise any
forward-looking statements except as required by applicable securities
laws.
SOURCE Athabasca Oil Corporation
