UTS Energy Corporation

Fort Hills oil sands project - production & upgrading of bitumen

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Message: UTS to receive $1.30 takeover offer from Total - 100-per-cent cash offer

UTS to receive $1.30 takeover offer from Total - 100-per-cent cash offer

posted on Jan 27, 2009 06:16PM

UTS to receive $1.30 takeover offer from Total

2009-01-27 19:40 ET - News Release

Ms. Elizabeth Cordeau-Chatelain of Total reports

LAUNCH OF A PUBLIC OFFER TO ACQUIRE UTS -- TOTAL CONSOLIDATES ITS OIL SANDS PORTFOLIO IN CANADA

Total SA's subsidiary, Total E&P Canada Ltd., is launching a public offer to acquire all the issued and outstanding shares of UTS Energy Corp. at a price of $1.30 per share, or a total amount of close to $617-million (Canadian) (about 380 million euros).

This offer is a 100-per-cent cash offer and represents a premium of approximately 57 per cent over the closing price of UTS's shares on Jan. 27, 2009,

and approximately 51 per cent over the weighted average trading price for the last 30 days.

Canada: http://www.total-ep-canada.com/

International: http://www.total.com/en/home_page/

The takeover bid circular will be published in the coming days, and the offer is expected to be open for acceptance from that date for a period of at least 60 days, subject to the date of receipt of the regulatory approval required from the Canadian authorities and to the acceptance of the offer by UTS's shareholders representing at least 66.67 per cent of the shares on a fully diluted basis.

UTS's main asset is a 20-per-cent stake in the Fort Hills project, located in the Athabasca region, in Alberta, at approximately 100 kilometres northeast of Fort McMurray. Petro-Canada, a Canadian company, is the operator of this project with a 60-per-cent stake, the remaining 20-per-cent stake being held by Teck Cominco.

The latest estimate of the Fort Hills project's resources is about four billion barrels of bitumen; these resources will be recovered using mining technologies. This project is expected to be developed in two phases of about 160,000 barrels of bitumen each and the first phase has received the main approvals needed for its launch. The project is being re-evaluated by the partners since October, 2008, in order to optimize its costs and timing. Depending on the results of the technical studies, the final investment decision for phase one should be made by 2010 and production could start in 2013.

This asset will strengthen Total's portfolio in the Athabasca region, comprising principally of the Joslyn project and the Northern Lights project, that are both located in the immediate vicinity of the Fort Hills project, owned by Total 74 per cent and 60 per cent, respectively. These projects will also be developed by mining techniques.

At the same time, Total is currently reanalyzing the costs, technology choices, structure of the Joslyn mine project and also defining a new schedule. Engineering studies for the Upgrader project situated in Edmonton and which is designed to process the bitumen from the various oil sands projects that Total is involved in are continuing as planned.

This acquisition is in line with Total's strategy of optimizing its heavy oil operations in the Athabasca region, an industry segment with significant long-term development potential.

Total exploration and production in Canada

Total is the operator of the Joslyn project with a 74-per-cent interest. The project will be mainly developed using surface mining technologies. The production potential of the project is currently estimated at 230,000 barrels per day.

Total also holds a 50-per-cent interest in the Surmont lease, located about 60 kilometres southeast of Fort McMurray. Phase one which started in 2007, has a capacity of 27,000 barrels per day at plateau production and is currently producing 18,000 barrels per day. It will be followed by phase two which will bring total production to approximately 110,000 barrels per day. Future phases at Surmont are also under study.

Total also holds a 60-per-cent share in the Northern Lights project since it acquired Synenco Energy in 2008.

Total is one of the world's major oil and gas groups, with activities in more than 130 countries. Its 96,000 employees put their expertise to work in every part of the industry -- exploration and production of oil and natural gas, refining and marketing, gas and power, and trading. Total is working to keep the world supplied with energy, both today and tomorrow. The group is also a first-rank player in chemicals.

Hg

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