CALGARY,
Aug. 29, 2014 /CNW/ - Athabasca Oil
Corporation (TSX: ATH) ("Athabasca" or "the Company") announces
that it has closed the sale of its 40% interest in the Dover oil
sands project to Phoenix Energy Holdings Limited ("Phoenix"), a
wholly owned subsidiary of PetroChina International Investment
Limited, for net proceeds of $1,184
million.
At closing, Athabasca received a cash payment of
$600 million, in addition to three
interest bearing promissory notes (the "Promissory Notes") issued
by Phoenix for the remaining
$584 million. The Promissory Notes
are unconditional and secured by irrevocable, standby letters of
credit issued by HSBC Bank Canada and mature as follows:
- on March 2, 2015 a cash payment
of $300 million;
- on August 28, 2015 a cash payment
of $150 million; and
- on August 29, 2016 a final cash
payment of $134 million.
"Closing of the Dover transaction is an
important milestone for Athabasca
and marks the beginning of a new chapter for our Company," says
Sveinung Svarte, President and CEO. "We can now finalise our
business strategy which will be focused on profitable production
and reserve growth, cash flow growth, cost discipline and balance
sheet flexibility. We intend to provide a full strategic update in
early September including revised guidance and capital plans. The
Company now has ample liquidity to continue development of its
Duvernay and Hangingstone core
assets and the timing of the cash payments under the promissory
notes is aligned with our capital spending plans over the next
couple of years."
About Athabasca Oil Corporation
Athabasca Oil Corporation is a Canadian energy company with a
diverse portfolio of thermal and light oil assets. Situated in
Alberta's Western Canadian
Sedimentary Basin, the Company has amassed a significant land base
of extensive, high quality resources. Athabasca's common shares trade on the TSX
under the symbol "ATH". For more information, visit
www.atha.com.
Reader Advisory:
This News Release contains forward-looking
information that involves various risks, uncertainties and other
factors. All information other than statements of historical fact
is forward-looking information. The use of a words such as "will",
"plan", "intend" and "continue" and similar expressions are
intended to identify forward-looking information. The
forward-looking information is not historical fact, but rather is
based on the Company's current plans, objectives, goals,
strategies, estimates, assumptions and projections about the
Company's industry, business and future financial results. This
information involves known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
information. No assurance can be given that these expectations will
prove to be correct and such forward-looking information included
in this News Release should not be unduly relied upon. This
information speaks only as of the date of this News Release. In
particular, this News Release may contain forward-looking
information pertaining to the following: the receipt of proceeds
from the Promissory Notes; the Company's expected need for and
allocation of capital; the Company's liquidity position; and the
Company's plans for and development activities with respect to the
Hangingstone and Duvernay
assets.
With respect to forward-looking information
contained in this News Release, assumptions have been made
regarding, among other things: the receipt of the payment under the
Promissory Notes in a timely manner; the Company's capital spending
plans over the next several years; future sources of funding for
the Company's capital programs; the Company's future debt levels;
the Company's ability to obtain financing and/or enter into joint
venture arrangements, on acceptable terms; and the impact that the
timing of the Company's receipt of payments made by Phoenix under the Promissory Notes will have
on the Company, including on the Company's financial condition,
capital programs and results of operations.
Actual results could differ materially from
those anticipated in this forward-looking information as a result
of the risk factors set forth in the Company's most recent Annual
Information Form ("AIF") dated March
18 2014, available on SEDAR at www.sedar.com, including, but
not limited to: the substantial capital requirements of
Athabasca's projects and the
ability to obtain financing for Athabasca's capital requirements; the
potential for adverse consequences in the event that the Company is
unable to collect any or all of the amounts owing to it under the
Promissory Notes; general economic, market and business conditions
in Canada, the United States and globally; including
risks affecting the ability of HSBC Bank Canada to honour
obligations under the irrevocable letters of credit issued by it to
secure the Promissory Notes; the potential for management estimates
and assumptions to be inaccurate; competition for, among other
things, capital; failure to satisfy certain conditions in
connection with the Company's debt and credit facilities; and risks
pertaining to the Company's debt and credit facilities.
The forward-looking statements included in this
News Release are expressly qualified by this cautionary statement.
Athabasca does not undertake any
obligation to publicly update or revise any forward-looking
statements except as required by applicable securities laws.
SOURCE Athabasca Oil Corporation