Replies to post #735 on The Rising Influence of Rising Affluence

[DewDiligence]

Athabasca Oil Sands (ATH.to) Sputters in First Day of Trading

[Does anyone here own this or another name that’s focused on the oil sands? T.i.a.]

http://www.marketwatch.com/story/athabasca-oil-sands-ipo-rises-in-debut-2010-04-08

›By Steve Gelsi, MarketWatch
April 8, 2010, 4:30 p.m. EDT

NEW YORK (MarketWatch) -- Athabasca Oil Sands Corp. shares skidded below their offering price Thursday as the Canadian company raised nearly $1.4 billion and made its Toronto trading debut.

Shares of Calgary-based Athabasca Oil Sands fell 6%, sinking C$1.10 to C$16.90 under its trading symbol of ATH on the Toronto Stock Exchange.

The company's initial public offering priced on March 30 at C$18 a share, with 75 million shares in the deal. Since then, jitters about Greece, coupled with fears of rising interest rates and mixed economic data have hung over the financial markets.

While oil crested over $86 a barrel early this week, it's been falling for the past two sessions. See Futures Movers.

With a market capitalization of about $7 billion, Athabasca now takes its place among publicly traded energy firms mining the vast petroleum reserves of the Canadian oil sands.

While the bitumen-based petroleum on the vast lands of Alberta contains a huge supply of oil, it's costly to dig it out of the ground and refine it into usable petroleum products.

While costs vary greatly between projects, most oil-sands operations turn a profit when oil sells for at least $25 to $50 a barrel. With oil at $80 a barrel now, oil sands promise a solid return.

But like any energy-based enterprise nowadays, the oil sands face the dilemma of oversupply at a time of sluggish economic growth.

Still, plenty of other major energy players continue to develop projects in the Canadian oil sands, including some new players.

PetroChina (PTR) recently inked a C$1.9 billion deal for a stake in two Athabasca Oil Sands projects: MacKay and Dover.

Exxon Mobil Corp. (XOM) , Suncor Energy (SU) , ConocoPhillips (COP) and Royal Dutch Shell (RDS-A) are among the major players already doing business in the Canadian oil sands.

Morgan Stanley Canada Ltd. and GMP Securities LP and Toronto-based GMP Capital Inc. led the sale for Athabasca Oil Sands.

Athabasca declared 114 million barrels of probable reserves, 26 million barrels of possible reserves and 7.1 billion barrels of contingent reserves as a developer of bitumen from oil sands in northeastern Alberta.‹

[DewDiligence]

Athabasca Oil Sands sells remaining 40% stake in MacKay River project to PetroChina for $666M:

http://online.wsj.com/article/SB10001424052970203462304577138644252057100.html

The MacKay sale comes less than a week after Alberta regulators approved the planned 150,000-barrel-a-day project. It is scheduled to start out at 35,000 barrels a day in 2014.

The sale raises one big question: Does PetroChina have the capacity to develop the project by itself? UBS AG analyst Chad Friess said Athabasca's decision to opt out of MacKay may endanger the success of the project because PetroChina will have to hire outside expertise in an already-tight labor market in Western Canada's oil patch.

Also see #msg-47103702.