Athabasca Oil Sands to buy Excelsior Energy

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Sept. 13 -- Athabasca Oil Sands Corp. said it entered into an agreement to purchase oil sands company Excelsior Energy Ltd. for $144 million (Can.).

AOSC said it is acquiring “concentrated, high-quality oil sands leases” at Hangingstone and West Surmont, and consolidating AOSC's current acreage position in the Hangingstone area.

AOSC said the acquisition of Excelsior is consistent with its strategy of “amassing a suite of large, critical sized assets which provide optimal long-term development potential for AOSC.”

Key attributes of Excelsior include:

• Contingent resources of about 183 million bbl {Estimate of contingent resources for Hangingstone from McDaniel & Associates as at Dec. 31, 2009; for West Surmont, from McDaniel & Associates report as at Dec. 31, 2008).

• Net cash of about $25 million (Can.) (prior to exercise of any Excelsior stock options or Excelsior warrants).

• About 26,607 net undeveloped acres of land on two contiguous blocks in the Hangingstone and West Surmont areas of the Athabasca oil sands region.

• Operatorship, with high working interests of 75% at Hangingstone and 64.3% at West Surmont.

• Patent for the combustion overhead gravity drainage (COGD) proprietary technology; project approval for a 1,000 b/d experimental pilot is expected in the latter half of 2010 with subsequent implementation and commissioning in early 2011.

After closing the transaction, AOSC said it will have 113,007 net undeveloped acres of land in the Hangingstone area.

“The combined Hangingstone acreage allows for both potential independent development by AOSC, as well as potential joint venture development opportunities,” the firm said.

Contact Eric Watkins at hippalus@yahoo.com.

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