With no update on the Calgary firm’s hunt for a partner to further develop its Great Divide oilsands lease expected until next year, the proposal revealed Thursday by Connacher could be the only viable near-term offer, according to Chad Friess of UBS Securities.

“I think they would prefer to have a joint venture if the terms were good, but it doesn’t look like anybody is clamouring to sign on,“ Friess told the Herald.

While Connacher’s roughly $800 million in net debt, as well as debt in 2012 forecast to outstrip cash flow by 9.3 times, do not constitute a crisis, Friess said, the company needs a capital injection if it wants to raise production or reduce operating costs.

That means a joint venture partner to bring money to the table or a cash-rich player to take Connacher out, Friess said.

Shares of Connacher halted trading Thursday so the company could issue a release about recent trading activity.

Pressed by the Investment Industry Regulatory Organization of Canada to issue a statement about why its shares were soaring — up 83 per cent in the two-week run-up to the trading halt — and trading at high volumes, the company reluctantly revealed that in the midst of an ongoing search for a joint venture partner first announced in July, it had received an unsolicited offer by an unnamed party to acquire all outstanding shares of Connacher.

“Under normal circumstances, this is not something that would be press released,” said Connacher CEO Richard Gusella. “This is a proposal, it’s not a takeover bid. No, we’re not in play.”

The regulator saw that Connacher shares were moving up as the broader market was losing ground, including other energy stocks, Gusella said, arguing there are “good and balanced” reasons for the steady rise, namely that Connacher has been unfairly beaten down over its debt and that prices for bitumen, which the firm produces, have increased by more than 50 per cent since the third quarter. He dismissed any suggestion of insider trading.

“It had nothing to do with us. We had a blackout on ever since we received that letter.”

Connacher’s board has appointed an adviser and legal counsel to evaluate the acquisition while the joint venture process continues. Connacher wants a partner to help fund a 20,000-barrel-per-day expansion at its Great Divide oilsands lease — where the company has two producing assets — and to pursue expansion on two conventional properties, Twining and Penhold.

Trading for Connacher, which currently produces about 14,000 barrels of oil equivalent per day, resumed by mid-afternoon Thursday in Toronto.

On the Thursday news, shareholder and senior noteholder West Face Capital Inc. called for a “comprehensive review of strategic alternatives” to “maximize value for all stakeholders,” typically code for putting the company up for sale — which is how Gusella took it.

“They’re entitled to their opinion,“ he said.

Counsel and secretary Alexander Singh for West Face Capital, an investment management firm, wouldn’t elaborate on the firm’s suggestion to Connacher.

Gusella said he doesn’t expect a conclusion to the joint venture process until next year.

“We’re talking to big companies that have very, very significant activities around the world in large measure. We’re on a list of candidates for capital.”

Shares of Connacher closed up two cents or 2.17 per cent Friday at 94 cents a share on the Toronto Stock Exchange.

rpenty@calgaryherald.com