Athabasca Oil Corp. was downgraded at Raymond James on growing concerns about its relationship with PetroChina.

Analyst Chris Cox lowered his rating on the stock to market perform from outperform and cut his price target to $7.50 from $10, telling investors that is it time to properly assess the probability of Athabasca receiving a $1.23-billion payment from the Chinese state-controlled oil giant.

The companies entered into a joint venture for the Dover and MacKay River oil sands projects that included a complex put/call option if Athabasca wanted out. The company sold its stake in MacKay River in January 2012, and exercised its option to sell its 40% ownership of the Dover project in April.

The payment from PetroChina is expected any day now, but Mr. Cox sees a risk regarding the payment, as well as its potential price and timing.

“Perhaps just as importantly, we believe the market will likely continue to be concerned regarding the intentions of PetroChina, at least as it pertains to the Dover put proceeds, and we don’t foresee any improved clarity on this issue for some time,” the analyst said in a report.

Recent media reports suggest PetroChina is trying to lower its Dover project put payment.

Mr. Cox believes the risks around the Dover put also raise concerns about the pace of development for Athasbasca’s Duvernay assets and the company’s ability to eventually secure a joint-venture partner.

The analyst also pointed out there has been a string of arrests of employees at PetroChina who are tied to Athabasca, which has stoked concerns relating to the Dover put proceeds. He said he doesn’t know what the individuals are being implicated for, but noted “it is tough to simply chalk up the connections back to Athabasca as merely coincidental.”