NEW YORK (AP) ¿ UTS Energy Corp. will sell its 50 percent stake in three Alberta oil sands properties to Exxon Mobil Corp. and Imperial Oil Ltd. for C$250 million (US$231.5 million), the company said Monday.
The operator of oil sands ¿ a tar-like bitumen that is extracted using mining techniques ¿ said the deal should generate after-tax proceeds of about C$200 million.
This, along with UTS's $440 million in cash and cash equivalents, leaves the company well positioned to fund its Fort Hills Project and its portfolio of other development opportunities, UTS said.
The deal also highlights Exxon Mobil's movement toward investing in greater production. Recently, Exxon ¿ which owns a large stake in Imperial Oil ¿ has faced criticism for not boosting production more rapidly. This purchase from UTS is a small deal, but it is still a step by the world's largest publicly traded oil company toward raising production volumes.
Under the terms of the deal, UTS will sell its interest in lease nos. 421, 022 and 023. It expects the deal to close over the next month.
"This transaction demonstrates the success of UTS' strategy of generating cash reserves organically, by finding new oil sands resources," said UTS CEO William Roach.
Shares of Exxon advanced 22 cents to $71.89, while Imperial Oil shares fell 92 cents to $36.73 in afternoon trading.