/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE
TSX Trading Symbol: UTS
CALGARY, Sept. 19 /CNW/ - UTS Energy Corporation (UTS) today announced
that it has signed a memorandum of agreement whereby its current partners,
Petro-Canada and Teck Cominco, will each earn a further five percent working
interest in the Fort Hills Project. Petro-Canada and Teck Cominco will
contribute a combined $750 million on UTS' behalf beyond the original
obligation of $2.5 billion. As a result, UTS is effectively funded up to the
first $7.5 billion of Fort Hills Project expenditures, with a $250 million
further contribution by UTS over the period. Based on the current expenditure
profile, the $7.5 billion is expected to be reached during the fourth quarter
"We are pleased to have reached an agreement with our Partners," said
Will Roach, President and Chief Executive Officer of UTS. "A 20% working
interest in the Fort Hills Project is an appropriate and meaningful level of
participation for UTS. With an increased production capacity of the first
phase of the Project to 140,000 barrels per day and the associated costs
rising to $15.2 billion, we needed to reappraise our capabilities and
requirements. Our new level of ownership and the associated funding commitment
are fitting for our Company."
The resulting working interests in the Fort Hills Partnership will be
Petro-Canada with 60%, Teck Cominco with 20% and UTS with 20%. The earn-in
will be structured in a manner consistent with the current Fort Hills
agreements. Closing of the transaction is subject to definitive documentation
and is expected to occur by the end of 2007.
"The transaction ensures the necessary financial flexibility to meet our
future funding needs and allows us more time to demonstrate the potential
value of our assets outside of the Fort Hills Project."
"The transaction will provide UTS with another two full drilling seasons
to delineate and further explore the highly prospective acreage we jointly own
with Teck Cominco on the west of the Athabasca River, thereby capturing
further value prior to accessing the additional equity and debt required to
complete the first phase of the Fort Hills Project. "
"This agreement also demonstrates the growth in the value of the Fort
Hills asset over the past three and a quarter years. The value of a one
percent working interest in Fort Hills has grown from about $1.6 million, the
amount we paid for purchasing the asset from TrueNorth, to $75 million today.
We believe that this funding allied with our highly prospective land position
provides a strong platform for continued growth over the next two years."
RBC Capital Markets acted as financial advisor to UTS and has provided
its opinion that the consideration under the transaction is fair from a
financial point of view to UTS.
UTS will host a conference call and webcast to further discuss the
matters contained in this news release. The call will take place on September
20, 2007 at 7:00 a.m. (Mountain) / 9:00 a.m. (Eastern). To participate in the
Live call participation: (416) 644-3414
Recorded call playback: (877)289-8525
passcode: 21247270 (followed by the number sign)
Webcast (and slides): www.uts.ca or
UTS Energy Corporation is based in Calgary, Alberta. The Company's common
shares (UTS) are traded on the Toronto Stock Exchange.
FORWARD-LOOKING STATEMENTS: Except for statements of historical fact
relating to the Company, this news release contains certain "forward-looking
statements" within the meaning of applicable securities law. Forward-looking
statements are frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate" and other similar
words, or statements that certain events or conditions "may" or "will" occur.
Forward-looking statements such as the references to anticipated capital costs
and sources of funding referenced in this news release are based on the
opinions and estimates of management at the date the statements are made, and
are subject to a variety of risks and uncertainties and other factors that
could cause actual events or results to differ materially from those
anticipated in the forward-looking statements. The Company undertakes no
obligation to update forward-looking statements if circumstances or
management's estimates or opinions should change except as required by law.
The reader is cautioned not to place undue reliance on forward looking
For further information:
For further information: Dr. William J. F. Roach, President and Chief
Executive Officer, or Wayne I. Bobye, Vice President and Chief Financial
Officer at (403) 538-7030