Enerplus weighs up Joslyn sale
Enerplus Resources Fund said today it may sell its 15% stake in Total's
planned C$9 billion (US$8.8 billion) Joslyn oil sands project in order to
concentrate on its own development in Alberta's oil sands play.
Enerplus has launched a review of its strategic options for the stake in the
Joslyn property, a development that could produce 100,000 barrels per day
by 2013, with a further 100,000 bpd expansion planned four years later.
Enerplus declined to put a value on the stake. However Cristina Lopez, an
analyst at Tristone Capital, estimated it to be worth up to C$420 million,
based on recent sales of other oil sands properties, Reuters said.
Instead of directing cash to building the massive Joslyn project, Enerplus
will concentrate on developing its wholly-owned Kirby property, which will
use steam pumped into the ground to liquefy and produce up to 40,000 bpd by
2017.
"Kirby they own 100% and they operate the property," Lopez said. "And at
Joslyn right now there isn't an upgrading alternative in place and without
that it's difficult to do a mining project. So (a sale) does make sense."
"Strategically, the future for Enerplus is more focused on steam-assisted
gravity drainage," said Ian Dundas, a senior vice-president at Enerplus.
"Joslyn is more of a mining operation and we aren't big enough to operate a
mine."
Enerplus did not say when it expected to complete the strategic review of its
Joslyn stake. It said it would use any cash raised from a sale of all or
part of the stake to cut debt.
Total has a 74% stake in Joslyn. Other partners in the project include Japan's
Inpex (10%) and privately held Laracina Energy (1%).
25 March 2008 15:23 GMT
| last updated:
25 March 2008 15:23 GMT
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