20:45:24 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



Alberta Oilsands Inc
Symbol AOS
Shares Issued 212,032,057
Close 2015-03-20 C$ 0.115
Market Cap C$ 24,383,687
Recent Sedar Documents

Alberta Oilsands may receive $34-million for Clearwater

2015-03-20 08:50 ET - News Release

Mr. Binh Vu reports

ALBERTA OILSANDS INC. ANNOUNCES RESULTS OF THE REVIEW OF ITS COMPENSATION CLAIM RELATING TO THE CLEARWATER LEASES TO BE CANCELLED

Alberta Energy has completed its review of Alberta Oilsands Inc.'s application under the mineral rights compensation regulation (MRCR) for compensation relating to the proposed cancellation of the company's oil sands leases located within the Fort McMurray urban development subregion (UDSR). Alberta Energy has determined the total compensation payable to Alberta Oilsands to be an aggregate of approximately $34-million, inclusive of applicable interest. The compensation amount is subject to final approval by Alberta Energy.

The leases to be cancelled comprise oil sands lease agreements 7407090336 and 7407070268 covering a total area of 1,920 hectares; and portions of land representing a total area of 2,421 hectares under oil sands lease agreements 7407080532 and 7407070269. The lease areas proposed to be cancelled are located within the UDSR, comprising 4,341 hectares or approximately 65 per cent of the total area of AOS oil sands leases at Clearwater.

The leases to be cancelled under the UDSR materially affected the company's previously proposed Clearwater SAGD project, as the designated site for the proposed project is located entirely within the UDSR cancellation area and the majority of the company's exploration expenditures were incurred within the UDSR cancellation area. Prior to the implementation of the UDSR, the company was waiting for final project approval from Energy Resources Conservation Board (now Alberta Energy Regulator). Subsequently, the Alberta Energy Regulator notified AOS that it had closed the company's Clearwater SAGD application, stating that because the proposed project is within the UDSR, the proposed project will not proceed as oil sands exploration and development are incompatible with future municipal development within the UDSR.

In making the company's initial compensation application under the MRCR, which included $41.9-million of development costs plus applicable interest, the company took the position that as the proposed oil sands lease cancellations resulted in AOS loss of the proposed Clearwater SAGD project as a whole, all expenditures incurred in respect of the exploration and development of the Clearwater SAGD project were fairly and reasonably expended as contemplated under the MRCR, and that AOS should receive compensation for the full amount of its expenditures on the Clearwater SAGD project.

However, Alberta Energy is of the position that compensation should only comprise expenditures incurred on the portion of the lease that is to be cancelled and not comprise any expenditures incurred in areas on the subject leases that are not being cancelled, despite those expenditures being related to the Clearwater SAGD project.

As the amount determined upon completion of the review is subject to final approval by Alberta Energy, AOS will review this matter further with its advisers and determine the appropriate next steps to bring this matter to a satisfactory conclusion. Additional announcements will be made as material developments occur.

We seek Safe Harbor.

© 2024 Canjex Publishing Ltd. All rights reserved.