Norwegian energy company, Statoil ASA (STO) and its Indonesian counterpart, PTT Exploration and Production (PTTEP) completed the deal to divide interests in the Kai Kos Dehseh (KKD) oil sands project in northeast Alberta, Canada.
Following the transaction, both the parties haven taken full control of individual development projects within the particular area, based on the terms of the agreement. Following the closure of the deal, Statoil continues to be the operator with an ownership of 100% of the Leismer and Corner development projects. Meanwhile, PTTEP will operate the Thornbury, Hangingstone and South Leismer areas with 100% ownership.
At the time of closure of the transaction, Statoil paid US $200 million to PTTEP, in addition to a working capital adjustment amount of CAD 238 million, effective Jan 1, 2013.
In 2007, Statoil got access to KKD through the acquisition of North American Oil Sands Corporation. PTTEP farmed in to the project in 2011 with a 40% interest, with Statoil remaining as operator.
The first phase of the steam-assisted gravity drainage full field development of KKD –the Leismer project – is currently in production. The project has an operating capacity of 20 thousand barrels per day (Mbbl/d). Initially, a final investment decision (FID) for the Corner project was planned in the first half of 2014. However, both Statoil and PTTEP decided to delay this until the completion of the transaction.
In 2013, Statoil’s overall production from Canadian oil sands was 15 Mbbl/d, down 6.3% from 2012. The decline was mainly due to the planned maintenance. According to both parties, split of ownership of the KKD leases was to maximize value.
Currently, Statoil has a Zacks Rank #3 (Hold). Investors interested in the same sector could consider stocks like Encana Corp (ECA), CVR Refining, LP (CVRR) and Matrix Service Company (MTRX), all of which sport a Zacks Rank #1 (Strong Buy).
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