UPDATE 2-Athabasca Oil loss widens; shares rise on Dover deal hopes
(Adds CEO and analyst quotes, details of Dover deal)
By Nia Williams
Aug 6 (Reuters) - Canada's Athabasca Oil Corp reported a bigger quarterly loss Wednesday as it set aside funds for future costs, but shares climbed on indications it had set a date for a delayed takeover of its Dover oil sands project in Alberta.
Shares of the oil sands producer surged as much as 4.8 percent after Athabasca Chief Executive and President Sveinung Svarte said Wednesday a C$1.23 billion deal with PetroChina Co Ltd to complete its takeover of the Dover project would close within a "reasonable time frame."
He declined to provide further details on the timing or reasons for the delay.
PetroChina was supposed to have completed the acquisition in June, but delayed payment amid a government-led corruption investigation into the Chinese national oil company.
Investors have closely eyed progress on the deal since Athabasca exercised a put option in April to sell its 40 percent stake in the planned Dover project in northern Alberta to partner Phoenix Energy, a unit of PetroChina.
The Dover project, 95 kilometres (59 miles) northwest of Fort McMurray, is expected to produce as much as 250,000 barrels of bitumen per day.
Last week, Reuters cited a person with knowledge of the deal as saying that PetroChina planned to complete the takeover by the end of September.
"We don't want to give you specific timelines because I am basically fed up of having my head to a gun for meeting a certain deadline here," Svarte said during a second-quarter earnings call.
"There are various reasons why it has taken longer but I don't think I will go into those details. What is important for us now is that we have a mutually understood path forward to closing and a targeted deadline."
In response to a question on whether the PetroChina corruption probe had contributed to the delay, Svarte said he did not know exactly what the impact was.
Shares were up 3.6 percent at C$6.34 in midday trading on the Toronto Stock Exchange, after earlier jumping as much as 4.8 percent.
Athabasca reported a bigger quarterly loss as it set aside C$49 million ($44.7 million) to settle potential claims by Phoenix Energy Holdings Ltd relating to future costs of abandoning oil and gas wells in the Dover and MacKay River areas in Alberta.
The amount and timing of any payment under the settlement is contingent on the successful closing of the Dover deal.
Dundee Securities analyst Geoff Ready said the payment was related to disused wells in the area where Phoenix will be using steaming techniques to recover bitumen.
"There will be extra costs to re-abandon these wells in such a way they can handle the temperatures that will be in the area. Obviously it's negative Athasbasca have to put more money down but it will be positive if that is the end of it," Ready said.
Athabasca's net loss widened to C$56.8 million, or 14 Canadian cents per share, in the second quarter ended June 30, from C$30 million, or 7 Canadian cents, a year earlier.
($1 = 1.0974 Canadian dollar) (Additional reporting by Sayantani Ghosh in Bangalore; Editing by Joyjeet Das and Bernadette Baum)
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