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Athabasca Oil Corp. issued a "clarification" on Monday of the murky situation regarding the sale of its stake in an Alberta oil sands project. It did little in the way of clarifying.

The stock, which has been under severe pressure in recent weeks, fell 7 per cent on the Toronto Stock Exchange on Monday.

Investors have grown increasingly nervous about whether Athabasca will receive the $1.23-billion it is owed by PetroChina Co. Ltd., which exercised a put option in April to acquire Athabasca's interest in the Dover project. The uncertainty follows detentions in Beijing of a number of high-ranking Chinese officials in what has been called an anti-corruption purge, including former energy executives tied to the Canadian operations.

"The company confirms that it continues to work with Phoenix Energy Holdings Ltd. to close the transaction in accordance with the terms of the put/call option agreement. Athabasca will update the market on material developments," it said in a brief statement. Phoenix Energy is PetroChina's Canadian unit.

Regulatory approval of the project earlier this year triggered Athabasca to exercise the put option, and investors have been anxiously waiting for the deal to close so the infusion of dollars can be put toward Athabasca Oil's other projects.

In a research note, Canaccord Genuity analyst Phil Skolnick said he believes the current downdraft in the stock represents a buying opportunity. He cited a Bloomberg report earlier this month, quoting the incoming director of the PetroChina subsidiary that operates the project, Shudong Chen, saying the company was committed to completing the purchase of the 60 per cent stake in Dover soon.

However, Chris Cox, analyst at Raymond James, cautioned investors to consider the risks that the put option proceeds could be halted, delayed or reduced. Mr. Cox downgraded the shares to "market perform" from "outperform."

"While we acknowledge that it is certainly plausible that PetroChina isn't looking to renege or renegotiate the Dover put agreement, we also believe that it is unlikely that the market will have certainty regarding PetroChina's intentions for some time. As a result, we believe that concerns regarding the Dover put are likely to weigh on the shares for some time," Mr. Cox wrote

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:00pm EDT.

SymbolName% changeLast
ATH-T
Athabasca Oil Corp
+0.58%5.23

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