Unconventional Oil

[Arctec]

Western Oil Sands' stock rises on reserves, possible sale

Friday, February 09, 2007
CALGARY — Shares in Western Oil Sands jumped up 6.8 per cent Friday, a day after the firm reported sharply higher reserves and said it's exploring a possible sale or merger.

The company, which has a 20 per cent stake in the Athabasca Oil Sands Project, reported late Thursday its proved and probable crude oil reserves increased year-over-year by 86 per cent to 577 million barrels, as of Dec. 31.

It also released, for the first time, its estimate of contingent resources at 891 million barrels.

Western said it is exploring alternatives “that will realize the full value of our assets and future growth potential. This may result in an acquisition or sale of assets, merger or other corporate transaction.”

Western Oil Sands and Chevron Canada each hold a 20 per cent interest in Shell's Athabasca project. Both have the option to join Shell's Jackpine and Pierre River developments.

Western's year-end reserves are based on an independent reserve evaluation by GLJ Petroleum Consultants Ltd.

The report indicates increases to Western's reserves resulting from the 2006 regulatory approval of the Muskeg River Mine Expansion Application, together with reserves associated with the sanctioning of Expansion 1 of the Athabasca Oil Sands Project.

On Nov. 29, Western issued a statement denying it had received a takeover bid.

Western's shares were up $1.97, or 6 per cent, to $34.02, on a volume of 2 million shares Friday in early-afternoon trading on the TSX.