UTS Energy sets 2009 budget

2008-12-11 08:39 ET - News Release

Dr. William Roach reports

UTS ANNOUNCES BUDGET FOR 2009

UTS Energy Corp. has finalized its budget for 2009.

The Fort Hills partnership has proposed a budget of $540-million for 2009, of which $24.5-million is UTS's share, and approved the first quarter of 2009 expenditures of $215-million, of which $8.6-million is UTS's share. During this first quarter, Petro-Canada as operator will reassess the project scope, budget and schedule in parallel with negotiating the lease extension agreement with the Alberta government. UTS's analysis of this budget, in combination with the expectations with respect to overall project budget reductions, suggests that UTS's Fort Hills financing from the earn-ins from both Petro-Canada and Teck will now extend until the first quarter of 2011.

"The Fort Hills budget is designed to provide the Fort Hills partnership sufficient time to work together, and with the Alberta government, to come to agreement on the best size and schedule for the Fort Hills project," said William Roach, president and chief executive officer. "This will also allow more time for the capital markets to normalize prior to UTS needing the requisite Fort Hills financing."

UTS also approved an engineering and exploration drilling program for its lands owned jointly with Teck (on a 50/50 basis) on the West and East sides of the Athabasca River. The exploration program will comprise in the order of 60 wells, strategically located, with a view to maximize the resource potential per dollar spent. UTS's share of this 2009 budget is $17-million. This somewhat reduced engineering and exploration budget is designed to maximize the exploration upside while husbanding our cash resources carefully. "This engineering and exploration budget, plus the UTS corporate general and administrative expenses, will be significantly less than, and as such, entirely financed by the final lease 14 (Equinox project) payment instalment of $40-million from Teck due at the end of the second quarter of 2009," said Dr. Roach.

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