Herbert Smith Freehills London energy team has advised PTTEP Canada Limited (PTTEPCA), a wholly-owned subsidiary of PTT Exploration and Production Public Company Limited (PTTEP), as international legal counsel on PTTEPCA signing an agreement with Statoil Canada Limited (SCL) to restructure the ownership of the five areas of the Canada Oil Sands Kai Kos Dehseh Project (KKD Project) in Athabasca, Alberta, Canada.

At closing of the transaction, PTTEPCA will directly own and operate 100% of the Thornbury, Hangingstone and South Leismer areas (THSL) and receive cash of US$200 million plus the additional amount calculated from a working capital adjustment relating to expenditures and revenues of KKD Project from January 1, 2013 until the closing date (approximately equivalent to US$235 million as at December 31, 2013), while SCL will own 100% of the Leismer and Corner areas (LC).

The transaction effectively involves PTTEPCA exchanging 40% of its interest in LC for an additional 60% in THSL plus certain cash amounts as mentioned above. The transaction is subject to the customary conditions precedent to closing as prescribed in the agreement, including approval of the Government of Canada, with an expected closing date by the third quarter of 2014.

The Herbert Smith Freehills team was led by energy partner Anna Howell, and senior associate Reza Dadbakhsh, assisted by associates Jantine Velzeboer, Yida Xu and Kelly Powers.

Anna Howell commented:

"We were delighted to act as international counsel again for PTTEP after having acted for them in 2011 on PTTEP acquiring its interests in the KKD Project.  The oil sands deposits in Canada provide a strong growth platform into unconventional resources for PTTEP."

Stikeman Elliott LLP acted as PTTEPCA's Canadian counsel and SCL were represented by Bennett Jones LLP in Calgary.