Petro-Canada has cried uncle in the wrestling contest for the Arctic natural gas assets of Canada Southern Petroleum, saying its latest bid is its last.
It said late on July 13 there is no point in continuing the struggle with Canadian Oil Sands Trust, whose offer of US$13.10 a share — 10 cents better than Petro-Canada’s third and final proposal — has the approval of Canada Southern’s board of directors.
Thus a two-month tussle that has had observers scratching their heads has apparently come to an end.
In bowing out, Petro-Canada Senior Vice President Kathy Sendall said that going beyond US$13 would exceed the range of values Petro-Canada had established and would “not represent value to us.”
“This was always just an option play for us,” she said. “Our best offer is on the table.”
COST described the estimated 927 billion cubic feet of gas assets in the Arctic Islands as a “life-long asset,” which has potential well into the future.
Chief Executive Officer Marcel Coutu said the resource gives COST a “hedging strategy with unparalleled duration for our natural gas requirements” at the Syncrude Canada oil sands operation.
He said it is also an “opportunity for us to participate in the development of a long-life energy resource.”
COST needs gas to fuel its 35 percent stake in Syncrude, although Tristone Capital analyst Tom Ebbern told the Calgary Herald that “there is a low likelihood you’ll see this gas on for an extremely long period of time, if ever.”