Skip to main content

The Globe and Mail

Uncertainty over deal pushes Athabasca Oil shares lower

The expectation is that Athabasca will finalize the joint venture process in July.

Company handout

Athabasca Oil Corp. stock tumbled on Monday on uncertainty over the timing of a joint venture deal to bolster development of the company's Alberta shale resources.

Athabasca, which recently concluded a long-awaited sale of its stake in the Dover oil sands project, aims to bring in a partner into its Duvernay holdings once drilling firms up its resource estimates. The sale of the Dover interest to PetroChina Co. Ltd. netted Athabasca $1.23-billion, giving the company some financial breathing room.

"While the recently released drilling results in the Duvernay are very encouraging, there was a subtle shift in the company's messaging regarding its plans to maximize the value of the Duvernay," GMP Securities analyst Jason Konzuk wrote in a research note on Monday. "The company still states that a joint venture partner could be part of the final development plan for the asset; however, uncertainty has increased with respect to the timeline for securing a partner and the scale of a potential JV."

Story continues below advertisement

He reduced his rating to "Hold" from "Buy," and cut his 12-month target to $9 from $10.50. Athabasca stock was off nearly 6 per cent at $7.26 on the Toronto Stock Exchange late in Monday's session.

Mr. Konzuk said the expectation was that Athabasca would finalize the joint venture process in July. There is no current deadline for bids, and the company served notice that it wants results from two more wells by that time, he said.

Report an error Licensing Options
About the Author
Mergers and Acquisitions Reporter

Jeffrey Jones is a veteran journalist specializing in energy, finance and environment for The Globe and Mail’s Report on Business, based in Calgary. Before joining The Globe and Mail in 2013, he was a senior reporter for Reuters, writing news, features and analysis on energy deals, pipelines, politics and general  topics. More

Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.