Total E&P Canada

Total E&P Canada

October 01, 2010 13:26 ET

Total E&P Canada Ltd Completes Acquisition of UTS Energy Corporation

CALGARY, ALBERTA--(Marketwire - Oct. 1, 2010) - Total E&P Canada Ltd. ("Total"), a Total SA subsidiary, announced today that it has completed the acquisition of all of the outstanding shares of UTS Energy Corporation ("UTS") with its main asset, a 20 per cent interest in the Fort Hills mining project in the Athabasca region of Alberta.

Under the terms of the Plan of Arrangement, UTS has transferred its assets, other than its participation in the Fort Hills Energy Limited Partnership and certain other assets, to SilverBirch Energy Corporation, a newly formed company, the shares of which have been distributed to UTS's shareholders.

"We are very pleased to finalize this acquisition and we believe that Total's offer represents good and fair value for shareholders," said Jean-Michel Gires, President and CEO of Total E&P Canada. "Today marks another positive step for Total as we develop our long-term, sustainable position in the Canadian oil sands. We look forward to working alongside Suncor and Teck, our partners on the Fort Hills Project."

Total paid a cash amount of $3.08 Canadian dollars (CAD) per share to acquire UTS, representing a total cash consideration of approximately CAD $1.5 billion. Taking into account the cash held by UTS following the transaction (CAD $355 million, equivalent to CAD $0.73 per share) the net cost of the acquisition for Total amounts to approximately CAD $1.15 billion (i.e. CAD $2.35 per share).

The Fort Hills project is operated by Canada's Suncor Energy Inc. with a 60 per cent interest, and the remaining 20 per cent interest is held by Teck Resources Ltd. The most recent estimates put Fort Hills' resources at approximately 3.4 billion barrels of bitumen, which will be recovered through open-pit mining. The project will be developed in two phases. The first phase of approximately 160,000 barrels per day has already obtained the necessary administrative approvals to launch development in the near future.

For more information on Fort Hills please visit the Total E&P Canada Ltd website.

Total Exploration and Production in Canada

Total operates the Joslyn lease with a 75 per cent interest. Production potential of this mining project is currently estimated at 200,000 barrels per day, with the Joslyn North Mine Project at 100,000 barrels per day.

Total also owns a 50 per cent interest in the Surmont SAGD(1) project. Phase 1 production began in 2007 and currently averages 23,000 barrels per day. Plateau production is expected to be 27,000 barrels per day. Phase 2 began recently, with production scheduled to start up in 2015, enabling Surmont's total production to increase to around 110,000 barrels per day. Further development phases are under study.

Total also has a 50 per cent interest in the Northern Lights project following the 2008 acquisition of Canada's Synenco Energy.

Total is one of the world's major oil and gas groups, with activities in more than 130 countries. Its 97,000 employees put their expertise to work in every part of the industry – exploration and production of oil and natural gas, refining and marketing, gas & power and trading. Total is working to keep the world supplied with energy, both today and tomorrow. The Group is also a first rank player in chemicals. www.total.com.

(1) Steam Assisted Gravity Drainage

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