Oil sands firm rejects Total bid
By Dina O'Meara, Calgary Herald
March 27, 2009
Oil sands junior UTS Energy Corp. again publicly rejected an unsolicited bid by Total E&P Canada, Friday labeling the French energy giant's offer as inadequate against a "significant" new oil sands discovery and improved financial environment.
UTS is a minority stakeholder in the $21-billion Fort Hills oilsand project led by Petro-Canada, which this week announced it was merging with Suncor Energy Inc.
"The proposed Suncor/Petro-Canada merger will mean the commitment of a new, more experienced and much larger operator, which should considerably enhance the value of Fort Hills and UTS," William Roach, UTS president and chief executive said in a news release.
Total bid C$617 million on UTS in February, which the Calgary-based company board refused, advising shareholders to do the same. This week Total chief executive Christophe de Margerie said the offer was a good premium that wouldn't be changed.
The Suncor-Petro-Canada merger could allow for scope modifications and capital cost reductions through potential integration with Suncor's existing operations, UTS said.
"Reducing capital intensity of Fort Hills lowers the economic threshold oil price needed to advance the project, improves economics for UTS and significantly reduces or potentially eliminates UTS' remaining financing requirements," the company stated.
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