Athabasca Oil Corporation has closed on a C$1.184 billion ($1.088 billion) deal with a unit of PetroChina to exit the proposed Dover oil sands project following months of negotiation, the company said.
The Calgary-listed company will see PetroChina subsidiary Phoenix Energy Holdings pick up Athabasca's 40% stake in project, in which it already held a 60% share.
Athabasca said on Friday it would receive a $600 million cash payment with three loans for the remainder for the transaction, initially announced in April.
The Canadian outfit elected to step away from the project to focus on Duvernay light oil assets in Central Alberta.
"Closing of the Dover transaction is an important milestone for Athabasca and marks the beginning of a new chapter for our company," chief executive Sveinung Svarte said.
"We can now finalise our business strategy which will be focused on profitable production and reserve growth, cash flow growth, cost discipline and balance sheet flexibility."
The steam-assisted gravity drainage project in eastern Alberta will be developed in multiple 50,000-barrels-per-day phases, with eventual capacity of 250,000 bpd eyed.
Upstream reported earlier this month that negotiations were still ongoing as the deal had taken longer than expected to close.
Adding to the complexity of the transaction was PetroChina’s provision for a C$49 million of settlement claims pertaining to the future abandonment costs of the Dover project and other oil and natural gas wells in the MacKay River area.
Further complicating matters is the investigation of four PetroChina executives by the Chinese government regarding the acquisition of oil sands properties.
The deal closing at Dover will be PetroChina's second wholly owned thermal oil-sands project in the region.
It also acquired Athabasca’s interest in the 150,000-bpd MacKay River project in early 2012 for C$680 million.
The two companies had previously formed Brion Energy, a joint venture, in 2010 to develop Dover and the MacKay River thermal projects.