On Tuesday Enerplus Resources Fund (NYSE:ERF) said that it will begin a review of strategic options regarding its 15% working interest in the Joslyn oil sands lease. Shares were up about 2% following the news.
In a statement, the company said that should the strategic review result in a decision to sell all or a portion of Joslyn, sale proceeds would initially be used to reduce Enerplus' current bank debt.
Enerplus first acquired a 16% working interest in Joslyn from Deer Creek Energy Ltd. in 2002. Deer Creek was subsequently acquired by Total E&P Canada in September 2005. In early 2006, Enerplus sold a 1% interest in Joslyn to Laricina for a common equity interest.
Joslyn, which is located in the Athabasca oil sands fairway in northeastern Alberta and consists of both mining and steam assisted gravity drainage [SAGD] development projects, is one of three principal investments in Enerplus' oil sands portfolio.
The fund also owns a 100% working interest in the operated Kirby SAGD project, and a 12% equity investment in Laricina Energy Ltd., a private oil sands company pursuing SAGD projects.