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Latest Headlines
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Jan 27, 2009 5:31:00 PM MST
Total launches C$617 million all cash bid for UTS Energy (Total-UTS)
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CALGARY _ Paris-based energy giant Total is making a C$617-million all-cash bid to buy UTS Energy Corp.(TSX:UTS) of Calgary.
The deal, announced late Tuesday, is for C$1.30 per share, a 57-per cent premium over the closing price of UTS shares on Tuesday.
UTS shares closed down two cents at 83 cents on the Toronto Stock Exchange Tuesday. In the past year, the shares traded as high as $6.28 in May and as low as 67 cents in October.
"This acquisition is in line with Total´s strategy of optimizing its heavy oil operations in the Athabasca region, an industry segment with significant long term development potential," Total said in a release.
UTS´s main asset is its 20-per-cent stake in the Fort Hills Project, located in the Athabasca region of Alberta.
The partners in Fort Hills _ which also include Petro-Canada (TSX:PCA) with a 60-per-cent interest and Teck Cominco Ltd. (TSX:TCK.B) with the other 20 per cent _ recently postponed a decision whether to build the mining portion of the project until next year.
They also shelved plans for a proposed upgrader indefinitely.
Costs of the project have ballooned to nearly $24 billion, up from an estimated $18.8 billion in June 2007.
The plan is to build a mine and bitumen extraction plant 90 kilometres north of Fort McMurray and an upgrader northeast of Edmonton.
Total said a stake in Fort Hills will strengthen its portfolio in the Athabasca region.
Total´s Canadian subsidiary has a 74-per-cent stake in the Joslyn Project in the area, and a 60-per-cent stake in the Northern Lights Project.
Total said it is also reanalyzing the costs and structure of the Joslyn mine project. It said engineering studies for the upgrader project in Edmonton are continuing as planned.
Total also holds a 50-per-cent interest in the Surmont lease, located about 60 kilometres southeast of Fort McMurray.
Total, which has 96,000 employees worldwide, is the fourth largest publicly traded integrated international oil and gas company in the world.
Its operations include upstream operations, such as oil and gas exploration, development and production and downstream operations from refining, marketing and shipping of crude oil and petroleum products.
It also produces base and specialty chemicals for the industrial and consumer markets.
Total also has interests in the coal mining and power generation sector.
Apart from the Fort Hills project, UTS has been exploring development potential of its other leases acquired jointly with Teck, including the new Equinox and Frontier oilsands mining projects.
UTS reported a third-quarter loss of $936,000 in the quarter ended Sept. 30, compared with a net loss of $839,000 for the same period last year. Revenues were $2.9 million compared to $1.8 million last year.
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