Max, Those Purchases are 1 month apart. #1 is CWPC Aug 25, 05 ($31/acre), #2 is Synenco Sept 05 ($8247/ha, $20379/acre).
This difference in price must be a quality issue. I still believe CWPC is a 'rising tide lifts all boats' investment and while there is money to be made there the deal metrics could be quite different. OTOH, I could be completely wrong and the Chinese just got fleeced for $76m and CWPC got a great deal but these are active lease sales, it doesn't usually work that way, and poorer quality leases go for cheaper or are left unsold.
I think you've already seen the historical sales data:
explorer.nickles.com
David
CWPC:
On August 25, 2005, the Company received notice that it was successful in its bid to purchase the 23,040-acre Eagle Nest Prospect, situated in the Athabasca Oil Sands in Alberta, Canada, for a cash price of US $727,187. The Alberta Energy Utilities Board ("EUB"), in its Crude Bitumen Resource Atlas of May 1996, estimated an initial in-place resource of 3.4 billion barrels crude bitumen on the Eagle Nest Prospect.
Synenco:
Synenco plans IPOBy DAVE EBNER
Monday, September 26, 2005 Posted at 10:24 PM EDT
From Tuesday's Globe and Mail
Synenco Energy Inc., an oil sands upstart backed by China's giant Sinopec, is going public to help finance a proposed $5.3-billion project to produce synthetic oil, which the company said Monday could end up costing as much as $6.9-billion
Calgary-based Synenco, which was formed in 1999, needs at least $250-million to cover work that must be done ahead of officially giving the Northern Lights project a green light, according to a preliminary prospectus filed with regulators Monday. The company did not say precisely how much it plans to raise.
Synenco owns 60 per cent of the project, which will include a mine and an upgrader, and must come up with a total of at least $3.2-billion.
It would likely raise half of the financing through equity, and the rest with debt, said FirstEnergy Capital Corp. analyst Mark Friesen. He said it's possible that Synenco could raise most of the equity it requires right now, though it might make sense for the company to raise some now and more later.
“The appetite for the oil sands is pretty high. I don't think they'll have a problem raising funds.”
Based on a private offering of 4.3 million shares at $14 each in August, Synenco's value coming into the IPO is about $400-million.
State-owned Sinopec (China Petroleum & Chemical Corp.) owns 40 per cent of Northern Lights, which it purchased in May for $105-million. The prospectus indicates that Sinopec, the world's No 7 oil company, will provide expertise in the area of upgrading bitumen, the ultraheavy crude that makes up the oil sands. Sinopec has built 11 new refineries in the past decade.
Sinopec's direct investment in an oil sands project is the second concrete indication that crude from Alberta's oil sands will eventually flow to China.
In April, PetroChina International Co. Ltd., another company owned by the Chinese government, signed a preliminary deal with Calgary-based Enbridge Inc. to take half the volume of the proposed 400,000-barrel-a-day Gateway pipeline that would move oil sands output from Edmonton to the West Coast for export.
Synenco said it is considering building the Northern Lights upgrader near Edmonton, and is looking for land there, as opposed to constructing it in Alberta's Fort McMurray area. The company hopes to have the first phase of Northern Lights producing 50,000 b/d of synthetic crude in late 2010, pushing it to 100,000 in 2012.
The company has put a $5.3-billion price tag on the project, but said that could rise as much as 30 per cent to $6.9-billion. Northern Lights includes a gasification unit, which is supposed to reduce the need for expensive natural gas and could make the project “virtually energy self sufficient,” the prospectus said.
A regulatory application for Northern Lights is expected to be filed in mid-2006, the company said.
Synenco is among the latest oil sands players to unveil an initial public offering. In April, 2004, Nexen Inc. partner OPTI Canada Inc. raised $301-million in an IPO. Calgary-based OPTI also raised several hundred million in equity privately, and obtained the rest of the $1.7-billion it needed from the banks.
With the $60-million Synenco raised privately in August, it made a record purchase last week, scooping up 9,215 hectares of oil sands land for $76-million, the highest price to date for any territory in the region. |
