The Fort Hills Energy L. P. announced that it will defer the final investment decision on the mining portion of the Project until a cost estimate consistent with the current market environment can be established. The Partnership now anticipates making a final investment decision in 2009. The Sturgeon Upgrader portion of the Project will be put on hold and a decision on whether to proceed with the Upgrader will be made at a later date.
“Given cost pressures, lower crude oil prices and uncertainty in the financial markets, it’s important to scale our efforts to focus on the mine first,” said Ron Brenneman, president and chief executive officer, Petro-Canada. “We’re giving ourselves some breathing room on the project schedule, so we can take advantage of a softening market to reduce costs.”
The Partnership is deferring the Upgrader at this time to reduce overall cost exposure on the Project and will now focus efforts on developing the mine and bitumen production facilities. The Partnership will use the extra time to evaluate opportunities for cost reductions, execution efficiencies and the overall project schedule for bitumen production. The Partnership remains committed to retention of the leases and is holding discussions with the Government of Alberta on the current lease term.
The Partnership consists of Petro-Canada with a 60% interest, UTS Energy Corporation with a 20% working interest and Teck Cominco Limited with a 20% interest, with Petro-Canada Oil Sands Inc., a wholly owned subsidiary of Petro-Canada, as the contract operator for the Project.
Petro-Canada is one of Canada’s largest oil and gas companies, operating in both the upstream and downstream sectors of the industry in Canada and internationally. Its common shares trade on the Toronto Stock Exchange (TSX) under the symbol PCA and on the New York Stock Exchange (NYSE) under the symbol PCZ.
UTS Energy Corporation is focused on growing and developing oil sands assets. The company was instrumental in re-establishing the Fort Hills Oil Sands Project and is the principal founder of the Fort Hills Energy Partnership. Based in Calgary, Alberta, the company’s common shares are traded on the TSX under the symbol UTS.
Teck Cominco Limited is a diversified mining company, headquartered in Vancouver, Canada. Its shares are listed on the TSX under the symbols TCK.A and TCK.B and on the NYSE under the symbol TCK. The company is a world leader in the production of zinc and metallurgical coal and is also a significant producer of copper, gold, indium and other specialty metals. Further information can be found at www.teck.com.
Petro-Canada will hold a conference call on Monday, November 17, 2008 at 10:00 a.m. eastern standard time (EST). Analysts and investors are invited to call 1-866-507-1212 (toll-free in North America), 00-800-4222-8835 (toll-free internationally), or 416-695-6622 at 9:55 a.m. EST. Media are invited to call 1-800-952-6845 (toll-free) or 416-695-6130. A live audio broadcast of the conference call will be available on Petro-Canada’s website at http://www.petro-canada.ca/en/investors/93.aspx on November 17, 2008 at 10:00 a.m. EST. Those who are unable to listen to the call live may listen to a recording of the call approximately one hour after its completion by dialing 1-800-408-3053 (toll-free in North America) or 416-695-5800 (pass code number #3275463). Approximately one hour after the call, a recording will be available on Petro-Canada’s website.