http://www.calgaryherald.com/business/energy-resources/oilsands+spinoff+starts+trading+this+week/3623641/story.html

The city's oilpatch will have a new oilsands player with a familiar face when SilverBirch Energy officially begins trading later this week.

The Calgary-based oilsands developer, which was spun out of the sale of UTS Energy Corp. to French oil major Total last week, will be listed on the Toronto Venture Exchange starting on Thursday.

Although it will be the city's newest oilsands company, SilverBirch will essentially be comprised of the same assets UTS had, with the exception of the Fort Hills oilsands lease.

In an interview, incoming CEO Howard Lutley said UTS never gained full recognition for its 50 per cent interests the Frontier and Equinox leases which it holds in partnership with Vancouver-based mining giant Teck, along with its other unexplored oilsands leases.

In almost every other respect, it's almost business as usual, notwithstanding the fact that Lutley, the former vice-president of mining, started Monday morning as the new CEO.

"It seems like a good start," he said.

"We've got the same team as we've had before, we're in the same offices -- so right now we're focused on getting everything in the right place so we can hit the ground running.

"From that respect it's quite an easy transition."

On Thursday UTS shareholders voted more than 99 per cent in favour of the sale of the company to French oil major Total and reorganizing the remaining assets into a new firm. Lutley said SilverBirch for the most part will follow the same formula of adding value by bringing its development and exploration projects forward while looking for partners at key stages to bring them to fruition.

Lutley said SilverBirch is well funded for at least the next 18 months while it moves ahead with a combination of mining and in situ projects. The Frontier and Equinox projects are longer term, with first oil unlikely to come on stream before 2020, but the in situ leases could theoretically come into production by 2016.

Although he said he's been watching the rise of the in situ sector and the enthusiasm for new initial offerings from companies like MEG Energy and Athabasca Oil Sands Corp., Lutley is reluctant to characterize SilverBirch in the same category. He says it's "the best of both worlds" having a big mining project in the hopper along with the flexibility of being able to build the relatively smaller bite size chunks of a steam-assisted gravity drainage project.

Frontier and Equinox will provide the foundation for the new company, with 891 million barrels of minable resources net to SilverBirch's working interest. SilverBirch currently expects to file regulatory applications for the projects in 2011 and Lutley said he expects the value associated with those assets -- as well as the new company's share price -- to increase as they progress toward regulatory approvals that are expected in 2013-2014.

In addition to the same assets and people, SilverBirch will have many of the same investors, with two major shareholders holding about 40 per cent of the company. It was that level of shareholder support that allowed UTS to withstand a hostile takeover bid from Total in 2009. Ironically, it was also that failed bid that paved the way for the formation of SilverBirch.

At some point, SilverBirch will likely be looking to bring additional partners in to fund its future developments, but Lutley said one of the lessons of Fort Hills is not to give up too much control over the pace and timing of the project to a single partner.

"We're kind of lucky because it's a simpler story," he said. "We don't have that overhang of Fort Hills."

Meanwhile the head of Total Canada, which assumes UTS's 20 per cent stake in Fort Hills, said he's ready to meet with his company's new partners regarding the future of the project.

Our first priority is to take over the new UTS . . . and understand the asset (Fort Hills) and its potentialities and have the opportunity to meet with two of the partners, Suncor and Teck . . . especially Suncor, the operator of this asset, to study if it could move forward in the near future," said Jean-Michel Gires. "Now that we are the new shareholders of UTS, we will do that as soon as possible."

spolczer@calgaryherald.com