Markets: Ausenco goes to Canada

Ausenco expects its foray into Canadian oil sands to boost earnings and give it the ability to work on all phases of projects in the sector.

Ausenco, the engineering, construction and project management mining company, said it has acquired a Canadian oil sands business, the privately held Calgary-based Projex Technologies, for $15.2 million.

In an ASX statement, Brisbane-based Ausenco said the Projex takeover will add $40 million of revenue and about $5 million in earnings before interest, tax, depreciation and amortisation in its 2014 financial year. The acquisition price represents an acquisition multiple of 2.9 times the forecast 2014 EBITDA of Projex of $5.2 million.

Canada’s oil sands resources are centered in the province of Alberta. They contain the third-largest proven crude oil reserves in the world, according to Ausenco. Last year total spending on oil sands projects in Alberta was $20.4 billion, according to Alberta’s Energy Resources Conservation Board. In 2015 capital spending is expected to be $23.4 billion.

Ausenco chief executive Zimi Meka said in a statement the company’s takeover of Projex now gives it the ability to work on all phases of oil sands projects. Projex does engineering work on oil sands recovery with a special focus on small and medium sized fields. It employs 220 people.

Meka was travelling and not available for comment, Ausenco said.

Ausenco shares have dropped 46 per cent in the last 12 months, according to Bloomberg data. Yesterday they fell 1 cent, or 0.6 per cent, to $1.82.