Athabasca Oil Sands boosted reserve estimates by 20 per cent on Thursday, a move that paves the way for wheeling and dealing by the newly public company.
Athabasca added 1.4 billion barrels of oil to its forecast of what lies under its Alberta properties, bringing total reserves to 8.7 billion barrels. While these numbers are huge, Peters & Co. analyst Jeff Martin put the move in perspective by noting that the additional barrels aren't likely to be on stream until at least 2025.
However, there is a short-term motivation for boosting long-term reserves.
Athabasca makes no secret of its intention to be a consolidator in the oil sands. The company also enjoys the deep-pocketed support of PetroChina, a joint venture partner in two of its existing properties.
"The increased resource estimate is still positive for the company as it should help to attract larger entities," said Mr. Martin in a report late Thursday. The Peters & Co. analyst said: "We continue to believe that the delineation program is part of an effort to book additional resources to facilitate the completion of more joint venture deals or to sell some of its assets."
Peters & Co. has a $15 one-year target price on Athbasca and an 'outperform' rating on the stock. The company went public at $18 a share earlier this year, raising $1.3-billion.
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