By Steve Gelsi
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 the Calgary company 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.
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.
Costs vary greatly between projects, but 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, 0857.HK) 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, SU.T),
ConocoPhillips (COP) and Royal Dutch Shell (RDSA, RDSA.LN) are
among the major players already doing business in the Canadian oil
sands.
Morgan Stanley Canada Ltd., GMP Securities LP and Toronto-based
GMP Capital Inc.(GMPXF, GMP.T) 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.
-Steve Gelsi; 415-439-6400; AskNewswires@dowjones.com
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