CALGARY, Alberta, Dec 14 (Reuters) - Norwegian oil company Statoil ASA has agreed to sell its Canadian oil sands assets to Calgary-based Athabasca Oil Corp in a deal worth up to C$832 million, Statoil said in a statement on Wednesday.
The transaction covers the 24,000 barrel per day Leismer oil sands plant in northern Alberta, the undeveloped Corner oil sands project and a number of midstream contracts associated with Leismer production.
Statoil will receive C$435 million in cash, 100 million common shares in Athabasca worth C$147 million, and up to C$250 million in a series of contingent payments triggered at U.S. crude prices above $65 a barrel.
Once the deal is complete Statoil will no longer operate any oil sands assets, but will still be a partner in five offshore oilfields in the Atlantic Canada region.
“This transaction corresponds with Statoil’s strategy of portfolio optimisation to enhance financial flexibility and focus capital on core activities globally, including offshore Newfoundland, Canada,” Lars Christian Bacher, Statoil’s Executive Vice-President for Development and Production International said in a statement.
Statoil halted development on the Corner project in September 2014, citing rising costs and limited space on export pipelines connecting Alberta to U.S. markets.
The Canadian government approved expansions to two major export pipelines out of western Canada last month, but the oil sands still carry some of the world’s highest full-cycle breakeven costs globally.
Athabasca said its output will more than treble to 40,000 barrels of oil equivalent per day as a result of the transaction, which adds to its existing Hangingstone oil sands project and light oil production in the Montney and Duvernay shale plays in western Canada.
In the third quarter of 2016 the company’s production averaged 12,000 boepd.
“This transaction is transformational for Athabasca and establishes scale with top tier thermal assets and people,” Athabasca’s chief executive Robert Broen said in a statement. (Reporting by Nia Williams; editing by Grant McCool)