Athabasca says more oil sands partners possible

* Talking to potential partners for oil sands

* Expects no deals this year

* Sees little downside for stock

By Scott Haggett

CALGARY, Alberta, June 25 (BestGrowthStock) – Athabasca Oil Sands
Corp (ATH.TO: ), which last year sold a stake in two oil sands
properties to PetroChina (0857.HK: ), is mulling similar deals on
other lands with other partners, its senior executives said on

The company, among the largest owners of undeveloped lands
in the oil sands of northern Alberta, is talking to potential
partners capable of bringing marketing expertise or new
technologies to projects.

However, the company is still firming up the size of the
resources on its six large properties, now estimated to contain
8.7 billion barrels of tar-like bitumen, before getting into
serious negotiations.

“We are talking to people,” Sveinung Svarte, the company’s
chief executive, said in an interview. “But these things take
long and we’d like to drill one more season to properly
delineate and show the full potential (of the properties).”

Svarte did not say if the company would look to additional
investments as large as its deal with PetroChina. Last August
the Chinese state-controlled firm paid C$1.9 billion ($1.8
billion) for a 60 percent stake in Athabasca’s MacKay and Dover
properties, which could eventually produce around 450,000
barrels per day.

However, the company is looking at sizable potential
partners and hasn’t been lacking suitors.

“We have had interest from multiple parties who have
contacted us,” said Bill Gallacher, who chairs Athabasca’s
board of directors.

Athabasca also once again defended its April initial public
offering. The company raised C$1.35 billion as it sold stock
for $18 per share, much more than first expected as it had
about C$3.2 billion in demand. However the shares have since
dropped by 36 percent as markets dropped because of European
debt turmoil and as founding shareholders, who paid a fraction
of the IPO price, cashed out.

Svarte said he believes there is little downside remaining
in the shares because the company has adequate funds to pay for
its cost of the developing the PetroChina joint venture and
could raise another C$2 billion from an agreement that could
see it sell its stake in the projects should it or its partner

“We are probably one of the few shares in the world that
has virtually no downside,” Svarte said. “We believe investors
will not be disappointed in the end. But investment in the oil
sands is a marathon. If you are in for a short-term profit or a
loss it’s the wrong place to be.”

Athabasca shares rose 24 Canadian cents to C$11.50 late on
Friday on the Toronto Stock Exchange.

Investing Research

($1=$1.04 Canadian)
(Editing by Peter Galloway)

Athabasca says more oil sands partners possible