Newmont Mining Corp., the world’s largest gold producer, is seeking to sell Alberta oil-sands leases that may fetch up to $541 million for an investment of less than $1 million in 1999.
Newmont spokeswoman Deb Witmer confirmed in an interview Tuesday that the Denver-based company is exploring options for its BlackGold leases. A notice of the offering was posted on the website of Scotia Waterous, a unit of Canada’s Bank of Nova Scotia that’s advising Newmont.
The company is seeking to capitalize on surging global interest in Alberta’s tarlike oil reserves, estimated to be the largest outside of the Middle East, as oil prices surge and conventional reserves become harder to find. Oil futures traded in New York are 43 percent higher than a year ago after touching a record $75.35 a barrel on April 21.
“There’s now a market for this stuff,” Richard Wyman, senior oil analyst at Calgary brokerage Canaccord Adams, said in an interview. “Five years ago, nobody cared” about oil-sands assets, he said.
Royal Dutch Shell Plc’s Canadian unit agreed on May 8 to pay $2.2 billion for BlackRock Ventures Inc., or about $3.60 per barrel of reserves owned by the Calgary-based oil-sands producer. Newmont’s reserves may sell for $1.35 per barrel because its project is less developed than BlackRock’s, Wyman said.
BlackGold contains an estimated 305 million barrels of oil capable of producing 35,000 barrels of oil a day, according to the notice from Scotia Waterous. The gold producer is willing to take cash, cash and shares, or cash and a retained royalty, the notice said.
High oil prices contributed to Newmont’s decision to explore options and see what bids it would get for BlackGold, Witmer said.
“The oil sands are at a pretty high value,” she said.
“It’s an opportune time to look at getting the max value out of it.”
Newmont owns three leases covering 9,600 acres located near oil-sands properties controlled by EnCana Corp., Devon Energy Corp. and Nexen Inc., according to the Scotia Waterous website.
