Athabasca still keen on Dover shale partner, but no rush to get deal done

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CALGARY – Athabasca Oil Corp. says it still wants to find a joint venture partner to help develop its land in Alberta’s Duvernay shale, but it’s in no hurry to get a deal done.

“We are continuing to evaluate our strategies to maximize the value of the Duvernay,” CEO Sveinung Svarte told analysts on a conference call on Thursday.

“The more we work on this, we believe the Duvernay play continues to get more valuable at any time.”

The Calgary-based company has been discussing its search for a Duvernay partner since at least last summer, but so far no deal has come to fruition. In March, Svarte said the company aimed to have an announcement by around mid-year, but on Thursday he did not want to pin down any precise timeline.

Athabasca (TSX:ATH) has about 350,000 net acres of Duvernay land. Eight horizontal wells have been drilled into the formation, with half of those producing at the end of the first quarter.

“Our final development plan could surely involve a partner on all this area or parts of that,” said Svarte.

The company wants more well results in hand before it’s in a position to announce a partnership. It also wants $1.23 billion to have landed in its bank account, following the recent sale of its interest in the Dover oilsands project to PetroChina.

A formal process is still ongoing for potential partners to pore over Athabasca’s Duvernay data and “the interest in the play is very large.” There’s no firm deadline for bids.

Last month Athabasca announced it would exercise its option to sell its 40 per cent stake in the Dover oilsands project to its partner, PetroChina. Regulatory approval of the project — a necessary milestone before the sale could happen — was delayed because of a legal dispute with a nearby aboriginal band.

Also Thursday, Athabasca’s board of directors approved a $29-million bump to Athabasca’s $480 million capital budget for 2014. A further update is expected in the third quarter, once the Duvernay strategy has been worked out and the Dover proceeds are received.

Athabasca’s net loss for the first quarter narrowed to $21.3 million, or five cents per share, from $25.5 million, or six cents per share.

Revenue was $32.8 million, up from $31.8 million.

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