By Upstream staff
A major shareholder of Canada’s Western Oil Sands has urged the company’s management and directors to consider the sale of the company.
“As a meaningful shareholder, we are officially requesting that management and the board of directors hire an advisor to seek alternatives to maximise shareholder value, and announce this to the public,” the letter, sent by shareholder Salida Capital, said, Canada’s Globe & Mail newspaper reported.
The letter,dated 20 September cited rapidly rising costs at the company’s Ahabasca oil sands venture, as well as the company’s plans to explore for oil and gas in Iraq, the newspaper said.
Western owns a 20% stake in the Athabasca project, where operator Shell has warned rising costs could hit expansion plans.
The company also surprised markets in May when it announced it would invest $45 million in exploration in Iraq. The news hit Western’s share price, which has fallen 5% this year.
Salida said the sale of the company would be well timed as foreign oil companies and large independents have expressed an interest in the company. Shell Canada paid $2.4 million to buy oil sands junior BlackRock Ventures in May, while France’s Total paid $1.7 billion for Deer Creek Energy, last year.
Salida suggested management consider either the sale of the complete company, the sale of its oil sands interests and the spinning off of the Iraq operations or conversion to a trust fund, the Globe & Mail reported.
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