Does that mean the tar-sand companies have hit bottom?
– A.H. A: How much would you pay for an oil asset that cost you $10 for every barrel produced? Total, a big French oil company, thinks it’s worth hundreds of millions of dollars. It costs Suncor, one of the most efficient tar-sand operators, $49 per barrel to produce oil from its mines. That means the best operator in the industry is taking a $10-per-barrel loss today. But last week, Total offered to pay $617 million (Canadian) for UTS Energy. UTS Energy’s only assets are 240,000 acres of non-producing leases in the heart of the tar-sand region and two uncertain tar-sand projects. Its largest project by far is a 20% slice of the Fort Hills mine. The major partner, Canadian oil company Petro-Canada, put the project on hold as costs ballooned from $14 billion to $24 billion and oil prices fell far below the expected costs to produce from the mine. UTS’ second project is a 50% stake in an even earlier stage project called Equinox. Equinox is just thousands of acres covered in low boreal f
