Oilweek Online

Cameco bid for uranium company Hathor Exploration will be allowed to lapse (Cameco-Hathor)

Uranium miner Cameco Corp. is giving up its hostile $625-million pursuit of Hathor Exploration Ltd., allowing a formidable competitor _ global mining giant Rio Tinto PLC _ an entry into Cameco`s home turf of northern Saskatchewan.After careful consideration we cannot justify increasing the price beyond our current offer and accordingly, we will let our offer lapse, chief executive Tim Gitzel said in a statement Monday.Hathor (TSX:HAT), owner of the coveted Roughrider uranium deposit in northern Saskatchewan, is embracing a rival $654-million offer from Rio Tinto, which had much less to lose in the takeover battle than Cameco (TSX:CCO) did, according to analysts.In a recent research note, Dundee Securities analyst David Talbot said Cameco was in a tough position _ on one hand it didn`t want to overpay for Hathor, but on the other it didn`t want the world` second largest mining company to have significant access to its core area, the uranium-rich Athabasca Basin.This move could be devastating for Cameco`s future in maintaining its `unique position in the Athabasca` _ to use Cameco`s own words, Talbot wrote.Northern Saskatchewan is one of the world`s most prolific uranium producing regions _ with Cameco`s major mine at McCarthur Lake the world`s largest uranium operation.The Saskatoon company, which employs about 3,300 people, also has mills and other assets in the Athabasca area, uranium fuel conversion businesses and other operations, including a stake in North America`s largest nuclear power plant, the Bruce station on Lake Huron in southwestern Ontario.The company has an aggressive plan to sharply boost its uranium output over the next several years, from Saskatchewan and elsewhere.Cameco would have to outbid Rio following any future uranium discoveries to maintain its growth profile, Talbot said.Rio Tinto would also likely prey upon Cameco (and others in the basin) for its highly qualified personnel _ not only geologists, engineers and miners, but also accountants, lawyers and other management positions.In the end, though, Cameco decided it would allow its $4.50-per-share offer to lapse on Tuesday.Cameco has remained disciplined through the bid process to ensure that we make the best decisions for our company and its shareholders, said Gitzel.Rio Tinto`s bid of $4.70 per Hathor share is set to expire on Wednesday. It received clearance for the takeover from Canada`s Competition Bureau last week.The company could choose to extend the offer`s deadline but it issued a statement Monday urging Hathor shareholders to tender their stock by 5 p.m. ET on Wednesday.Hathor shares fell about seven per cent to $4.69 on news Cameco won`t raise its offer, while Cameco`s shot up five per cent to $18.25 on the Toronto Stock Exchange.Rio Tinto gained more than six per cent to US$49.18 in New York trading.There has been scuttlebutt that Rio Tinto and Cameco could join forces to develop Hathor`s Roughrider deposit.Cameco works with French nuclear company Areva on many of its assets and would therefore be no stranger to a similar joint-venture with Rio. And Rio Tinto wouldn`t need to spend billions to build new mills or other infrastructure if it collaborated with Cameco, which has a dominant presence in the region.But Talbot is among the analysts who never saw a joint venture as a possibility.If this were a real option, Rio and Cameco would not continue to one-up themselves and would have talked already, he wrote in last week`s research note. Rio Tinto wants to gain entry in what is likely the best uranium jurisdiction in the world.Allowing the bid to lapse will not hamper Cameco`s plan to double annual uranium production to 40 million pounds by 2018, Gitzel said.Our plan involves existing assets in our development pipeline and we remain on track to meet our objectives. We will continue to explore other growth opportunities, but only where there is a clear benefit to our shareholders, Gitzel said.Cameco had about half a billion dollars of cash or cash equivalents at the end of September, according to its most recent quarterly report.During the third quarter, Cameco`s operations generated $189.7 million of cash as it realized higher prices for uranium and higher sales volumes.However, there is some uncertainty about the future of the nuclear power following the spills of radioactive materials in Japan following the earthquake and tsunami in early March, which damaged the Fukushima Dai-ichi generation plant.

Bowood Energy``s Q3 loss stable at $1.1 million as revenue, capital spending rise (Bowood-Energy)

CALGARY _ Junior oil and gas company Bowood Energy Inc. (TSXV:BWD) posted a $1.1-million net loss in the third quarter, about the same as a year earlier.Revenue rose to nearly $1.6 million from $1.2 million in the third quarter of fiscal 2010 but capital spending nearly doubled to $4.7 million during the quarter. The loss was attributed to an accounting provision related to its holdings.The company says its rights to 8,800 acres (3,561 hectares) of Crown land in the Wildwood area were allowed to expire in the quarter and, under International Financial Reporting Standards, the carrying value of the land was expensed.The Calgary-based firm has been focusing on the Bakken play in southern Alberta.The loss amounted to about four-tenths of a cent and compared with a loss of six-tenth of a cent, when there are fewer shares outstanding.

Kent says ``Kyoto is the past`` but refuses to confirm Canada``s withdrawal (Kent-Climate-Talks)

OTTAWA _ Environment Minister Peter Kent says he`s heading to climate talks in South Africa this week in search of a new agreement.But Kent refused to say whether that also means Canada is pulling out of the Kyoto Accord on reducing greenhouse-gas emissions.He insists, however, that Canada will not make a second commitment to that accord.Kent says Kyoto represents the past, while agreements made at more recent climate summits in Copenhagen and Cancun are the future.And he says talks in South Africa are aimed at moving forward the global effort to reduce climate change.Kent made the remarks after announcing Canada is spending another $600 million to continue with what the Conservative government is calling a clean-air agenda.

Tory bill could restore local power to oppose wind, solar energy projects (Green-Energy-Bill)

TORONTO _ A Progressive Conservative is introducing legislation today that would restore local powers to oppose wind and solar energy projects.Tory Todd Smith says his private member`s bill would give municipalities more say in such projects, which are being built over the objections of local residents.He says the bill would remove a section of the Green Energy Act that stripped municipalities of their decision-making powers.Smith says he`s hoping the New Democrats and some Liberals will support the bill, because many of the municipalities they represent are clamouring for the change.Even if both opposition parties support the bill, it may never become law.The minority Liberals still control which bills come up for third and final reading, and may decide to block it even if it passes second reading.

Anadarko says a natural gas field off the coast of Mozambique is the largest it``s ever found (US-Anadarko-Petroleum)

NEW YORK _ Anadarko Petroleum Corp. said Monday that a natural gas field discovered off the coast of Mozambique is the largest the company has ever found.The Houston oil and gas company said the East African offshore field contains 15 to 30 trillion cubic feet of recoverable natural gas, up from an initial estimate of 6 trillion cubic feet. That`s enough to satisfy U.S. natural gas demand for a year.Africa`s eastern coast has long been considered a peripheral player among world natural gas producers. But the Anadarko discovery, along with a similarly large find by Italian energy company Eni SpA in October, has elevated Mozambique as a potentially major gas exporter.This could be one of the most important natural gas fields discovered in the last 10 years, Anadarko Chairman and CEO Jim Hackett said.The company is building a facility in the region to bring the gas ashore for international export.Anadarko has a 36.5 per cent interest in the field. Mitsui E&P, BPRL Ventures Mozambique B.V., Videocon Mozambique Rovuma and Cove Energy Mozambique Rovuma Offshore Ltd. also own stakes in the field.Shares are up $3.23, or 4.5 per cent, to $75.07 in premarket trading.

Oilsands operator Opti Canada taken over by China``s CNOOC for US$2.1 billion (Opti-Canada-Takeover)

CALGARY _ Oilsands operator Opti Canada Inc. (TSXV:OPC) has been taken over by Chinese energy giant China National Offshore Oil Corp in a deal valued at US$2.1 billion.Opti shares were halted on the TSX Venture Exchange pending the news.Before stock markets opened Monday, Opti said it had closed the sale of the company to the Chinese firm also known as CNOOC.CNOOC is China`s largest producer of offshore crude oil and natural gas and one of the biggest independent oil and gas companies in the world.Opti said it expects its shares to be delisted from the TSX Venture Exchange, effective Thursday, Dec. 1.The takeover is one of many Chinese miners, oil companies and investment firms have made around the world as the country seeks secure supplies of minerals, oil and gas and other raw materials to feed its rapidly growing economy.In Canada, Chinese companies have bought up miners, potash assets, oilsands interests and natural gas producers.Opti`s main asset is its 35 per cent stake in the Long Lake oilsands joint venture with Nexen Inc. (TSX:NXY), the project`s operator.At Long Lake, the companies pump steam deep underground to soften the peanut butter-thick bitumen so it can flow to the surface. The project is unique in that uses the dregs of each barrel of crude as a fuel source.The operation has been beset by a number of glitches since it began operating in 2008 that have prevented it from reaching is target production rate of 72,000 barrels per day,Opti filed for court protection from creditors earlier this year and struck a deal this summer to be sold to CNOOC.

Cameco bid for uranium company Hathor Exploration will be allowed to lapse (Cameco-Hathor)

SASKATOON _ Canadian uranium producer Cameco Corp. (TSX:CCO) has backed away from trying to acquire Hathor Exploration Ltd. (TSX:HAT), owner of the Roughrider deposit in Saskatchewan.After careful consideration we cannot justify increasing the price beyond our current offer and accordingly, we will let our offer lapse, Tim Gitzel, president and CEO of Cameco, said in a statement MondayCameco has remained disciplined through the bid process to ensure that we make the best decisions for our company and its shareholders.Hathor is supporting a rival $654-million bid from Anglo-Australian mining giant Rio Tinto PLC (NYSE:RIO).The Rio Tinto offer received clearance from Canada`s Competition Bureau last week.Cameco said Monday it will allow its most recent offer of $625-million, or $4.50-per-share, to expire on Tuesday.Rio Tinto`s bid of $4.70 per Hathor share is set to expire on Wednesday.The company could choose to extend the offer`s Nov. 30 deadline but it issued a statement Monday from Montreal urging Hathor shareholders to tender their stock by 5 p.m. ET on Wednesday.Hathor shareholders whose shares are registered in the name of an investment advisor, stockbroker, bank or trust company should contact their intermediary to ensure they meet any tendering cut-off times established by the intermediaries, Rio Tinto said.The company also said Hathor shareholders can get assistance in tendering their stock from Rio`s agent, Laurel Hill Advisory Group, at 1-877-452-7184 or assistance(at)laurelhill.com.Cameco has said repeatedly, beginning in August when it announced the proposed hostile takeover, that it believed Hathor`s valuation of the Roughrider deposit was too high because of the infrastructure spending that will be required.Gitzel said Monday that allowing the bid to lapse will not adversely affect Cameco`s plan to double annual uranium production to 40 million pounds by 2018.Our plan involves existing assets in our development pipeline and we remain on track to meet our objectives. We will continue to explore other growth opportunities, but only where there is a clear benefit to our shareholders, Gitzel said.According to Cameco`s most recent quarterly report, the Saskatoon-based company had about half a billion dollars of cash or cash equivalents at the end of September.During the third quarter, Cameco`s operations generated $189.7 million of cash as it realized higher prices for uranium and higher sales volumes.However, there is some uncertainty about the future of the nuclear power following the spills of radioactive materials in Japan following the earthquake and tsunami in early March, which damaged the Fukushima Dai-ichi generation plant.

Connacher sells Latornell property and shares in Gran Tierra Energy (Connacher)

CALGARY _ Connacher Oil and Gas Ltd. (TSX:CLL) said Monday it has increased its cash holding to $120.3 million, thanks to the sale of its Latornell properties and its shares of Gran Tierra Energy Inc. (TSX:GTE).The diversified oil and gas producer had previously announced its intentions to sell the assets as it works to pay down its debt. It did not specify how much it received for the individual sales, but its stake in Gran Tierra had been valued at about $20 million. The company`s cash balance stood at $81.7 million at Sept. 30.With our increased cash balances and liquidity-raising initiatives, we remain confident that we will meet all of our 2012 financial obligations, including the repayment of $100 million in convertible debentures due in June 2012, chief executive Richard Gusella said in a statement.Without diluting our existing shareholders we can reduce debt, deal with any adversities that might arise from weak general economic conditions and properly maintain our valuable oil sands, conventional and refining assets.The company continues to look for a buyer or joint venture partner for its Great Divide oilsands project as well as conventional crude and natural gas properties at Twining and Penhold in Alberta.On conclusion, which we anticipate will now occur next year, these initiatives could result in further debt reduction and an acceleration of growth activities on our assets, Gusella said.

Paramount spins out oilsands business into separate company (Paramount-Oilsands)

CALGARY _ Paramount Resources Ltd. (TSX:POU) has reorganized its operations and plans to spin out its oilsands and bitumen businesses into a a new wholly owned subsidiary, Pixar Petroleum Corp.Paramount said Monday that William Roach, former CEO of oilsands operator UTS Energy, will become the new president and CEO of Pixar.James Riddell, Paramount`s president and chief executive, has been appointed the executive chairman of Pixar.The reorganization is being undertaken to create a focused, self-funding oilsands entity in order to accelerate the development of Paramount`s bitumen interests, the Calgary oil and gas company said in a release before markets opened.When the reorganization is complete, Pixar will own all of Paramount`s oilsands and bitumen leases _ including Paramount`s Hoole and Saleski leases _ in the western Athabasca region of Alberta.Paramount explores for, develops, processes, transports and sells oil and natural gas and operates in western Canada.

Cameco bid for uranium company Hathor Exploration will be allowed to lapse (Cameco-Hathor)

SASKATOON _ Canadian uranium producer Cameco Corp. (TSX:CCO) has backed away from trying to acquire Hathor Exploration Ltd. (TSX:HAT), owner of the Roughrider deposit in Saskatchewan.Hathor is supporting a rival $654-million bid from Anglo-Australian mining giant Rio Tinto PLC (NYSE:RIO).The Rio Tinto offer received clearance from Canada`s Competition Bureau last week.Rio Tinto`s bid of $4.70 per Hathor share is set to expire on Wednesday but will likely be extended now that Cameco has backed off.Cameco said Monday it will allow its most recent offer of $625-million, or $4.50-per-share, to expire on Tuesday.