Business
UTS announces asset disposition valued at C$250 million and terminates formal value maximization process
UTS announces asset disposition valued at C$250 million and terminates formal value maximization ...
About this update from Imperial Oil Limited
[{"type":"text","content":"\n\n\n\nNov. 2, 2009 (Canada NewsWire Group) -- CALGARY, Nov. 2 /CNW/ -- UTS Energy Corporation (\"UTS\") is pleased to announce the disposition of its 50 per cent working interest in Alberta Oil Sands Lease Nos. 421, 022 and 023 (the \"Lease 421 Area\") located east of the Firebag River in north-eastern Alberta. Imperial Oil and ExxonMobil have agreed to jointly purchase UTS' working interest for C$250 million.\"Our primary objective has always been to deliver shareholder value,\" said William Roach, President and Chief Executive Officer. \"This transaction demonstrates the success of UTS' strategy of generating cash reserves organically, by finding new oil sands resources. By implication, this transaction also demonstrates the market value of the Equinox and Frontier Projects, and UTS' broader portfolio of assets outside of the Fort Hills Project.\"Lease 421 was acquired in a land sale in late 2006 and was initially cored with five drill holes in early 2008. Based on those results, the two adjacent leases (Leases 022 and 023) were purchased and during the 2008/2009 winter season another 54 core holes were drilled, bringing the total number of core holes in the Lease 421 Area to 59. As a result, 29 sections of the Lease 421 Area have been drilled to an average density of approximately two core holes per section. An area equivalent to 24 sections was found to be prospective; however, insufficient drilling has been completed to fully determine the ultimate resource potential in the Lease 421 Area.UTS anticipates that the estimated after-tax proceeds will be C$200 million. UTS remains strongly funded with an estimated C$440 million in cash and cash equivalents, which, taken in combination with the C$695 million approximate remaining earn-in owed to UTS by Teck and Suncor on the Fort Hills Project, leaves the Company extremely well positioned to respond to the needs of both the Fort Hills Project and its portfolio of other development opportunities.The transaction is subject to normal closing conditions and is expected to close over the next month. This anticipated closing is a major milestone for UTS and marks the end of the formal value maximization process started in January of 2009 in response to the hostile takeover bid launched by Total E&P Canada Ltd.\"The disposition of the Lease 421 Area confirms the value of UTS' asset ba...