January 3, 2012 / 2:23 PM / in 6 years

UPDATE 2-Athabasca to sell 40 pct stake in oil sands project

* To sell stake to JV partner PetroChina for C$680 mln

* Cuts 2012 capital budget by about C$190 mln

* Maintains 2012 production view (Adds details on capex, 2012 production outlook)

Jan 3 (Reuters) - Athabasca Oil Sands Corp exercised its option to sell its 40 percent stake in the MacKay River oil sands project to a unit of PetroChina for C$680 million to focus on developing other projects.

The Calgary, Alberta-based company reiterated its production guidance of 8,000-10,000 barrels of oil equivalent per day (boepd) by the end of this year, but cut its capital budget by about C$190 million as a result of the sale.

It had planned to spend C$203 million of its capital budget of C$700 million on the Mackay River project.

Athabasca plans to use the proceeds to further its strategy of boosting oil sands’ share in total production to 50 percent, with the rest coming from its light oil division.

It had earlier said if options for MacKay River and Dover, another large project, are exercised, three of its other prospects would be fully funded.

The one-month window to exercise the option opened last week, after Athabasca got regulatory approval for the 150,000- barrel-a-day project MacKay River project in northern Alberta.

Shares of the company were up 3.36 percent at C$12.91 on Tuesday on the Toronto Stock Exchange. (Reporting by Maneesha Tiwari in Bangalore; Editing by Supriya Kurane, Sriraj Kalluvila)

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