Statoil to buy North American Oil Sands

Statoil ASA has agreed to buy North American Oil Sands Corp. (NAOSC), a private Calgary company developing 275,200 gross acres of oil sands leases in the Athabasca region of Alberta, for $2 billion in cash.

Apr 27th, 2007

By OGJ editors
HOUSTON, Apr. 27 -- Statoil ASA has agreed to buy North American Oil Sands Corp. (NAOSC), a private Calgary company developing 275,200 gross acres of oil sands leases in the Athabasca region of Alberta, for $2 billion in cash.

Statoil estimated NAOSC's recoverable reserves at 2.2 billion bbl.

The acquired company has plans to produce as much as 220,000 b/d of bitumen via steam-assisted gravity drainage from leases north of the town of Lac La Biche.

It also plans an upgrader with a first phase, scheduled to start up in 2012, able to process 75,000 b/d of bitumen. Capacity might eventually expand to 250,000 b/d. NAOSC had acquired 1,351 acres near Edmonton for the upgrader but was considering other sites.

Statoil said regulatory approvals are nearly complete for a pilot production scheme, the 10,000-b/d Leismer demonstration project. It expects start-up in late 2009 or early 2010.

Statoil expects the commercial project, called Kai Kos Dehseh, to come on stream in 2011 and to produce 100,000 b/d of bitumen by the middle of the next decade and more than 200,000 b/d by the end of the decade.

NAOSC's principle shareholders, Paramount Resources Ltd., funds managed by affiliates of ARC Financial Corp., and Ontario Teachers' Pension Plan, have agreed to tender their shares, Statoil said.

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