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Athabasca keeps the oil, drops the sands

Bitumen royalties accounted for 10 per cent of total Alberta government revenues in 2010-201, a number expected to climb to about 20 per cent, or $9.9-billion, by 2014-2015.

Jeff McIntosh/Jeff McIntosh/The Canadian Press

Athabasca Oil Sands Corp. is transforming -- to the point where it changed its name to make sure people get the point. Oil sands? Be gone.

The company is now called Athabasca Oil Corp., although it still mentioned its oil sands assets in its name-changing announcement following its annual meeting Thursday. Is the compressed name a hint of what's to come?

Athabasca, in 2010, sold 60 per cent of its Dover and MacKay River projects to PetroChina International Investment Co. That deal came with a put/call option, giving either side the right to trigger a sale of the rest of the projects to PetroChina following certain regulatory approvals. The MacKay River project hit that mark in January, and PetroChina now owns 100 per cent of the steam-assisted gravity drainage operation. It is China's first wholly-owned oil sands project.

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Outsiders expect the same to happen when Dover receives its regulatory thumbs-up, which would leave Athabasca Oil Sands with an extraneous word in its name.

Indeed, when PetroChina ended up with MacKay River, Athabasca's chief executive Sveinung Svarte immediately started trumpeting the company's light oil prospects, saying the money from the PetroChina deal will help the Canadian company chase light oil. Thursday's statement leads investors in the same direction.

"The new name better reflects Athabasca's asset base, which is comprised of not only its ongoing development in the oil sands but also of important bitumen resources in carbonate formations in the Athabasca area and significant growth and success with light oil in Alberta's northwest. The company aspires to grow its production to over 200,000 barrels of oil equivalent per day by 2020 deriving half from its thermal oil division and half from its light oil division."

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