PetroChina International Subco provides a CAD 430 million loan to Athabasca Oil Sands Corporation for the repayment of senior secured notes, accrued interest, and related costs (Linked to Record ID#93575)

Project narrative

On February 10, 2010, PetroChina International Subco, a wholly-owned subsidiary of PetroChina International, provided a CAD 430 million non-revolving loan to Athabasca Oil Sands Corporation for the repayment of the company's outstanding senior secured notes (issued bonds), which totaled CAD 400 million, as well as accrued interest and other related costs. The loan had a maturity date of 12 years and was payable semi-annually at a rate of LIBOR plus 450 basis points, which in 2011 was an effective rate of 5.8%. When applicable, it was payable on a pro-rata basis with a second loan (recorded at Record ID: 93575) and a potential third loan, which was never disbursed. The loan was provided as part of a financing arrangement in which PetroChina International Subco fully acquired 1487645 Alberta Ltd., which held a 60% non-operated working interest in the MacKay and Dover oil sands projects. The total value of the transaction was CAD 1.9 billion. The loan was tied to a second disbursed loan (#93575), both of which were closed on March 15, 2012. Athabasca Oil Sands Corporation repaid the loans by exercising its MacKay River Project put option, guaranteed as part of the original transaction, in which the company sold its remaining 40% stake in the project to PetroChina International Subco. This netted the company CAD 680 million, of which about CAD 468 million was spent on repaying the two loans described above. The MacKay River Oil Sands Project is now wholly owned and operated by PetroChina Canada, and produces 35,000 barrels of bitumen a day, with the ultimate production projected at 150,000 barrels a day. The Dover Oil Sands Project, which was also funded by the financial transaction which disbursed this loan and the loan in Record ID 93575, is expected to produce 250,000 barrels of bitumen a day. The Dover Oil Sands Project was fully acquired by PetroChina International Subco on August 29, 2014, when Athabasca Oil Sands Corporation exercised its put option, which also prevented the company from taking a third loan from PetroChina.