Osum Continues to Build on its Position in the Saleski Carbonates – Acquisition Increases Holdings in Saleski Region to Over 170,000 Net Acres

Posted: Jul. 06, 2011     Author: Osum Oil Sands Corp

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW.

CALGARY, ALBERTA / July 6, 2011 / Oil Sands Corp. (“Osum” or the “Company”), a private pure play in-situ oil sands developer, announced today that it has acquired a 100% interest in an additional 78 sections (49,920 acres) of oil sands leases in the Saleski area. The new leases, located within townships 84 through 87, ranges 19 through 23, are largely contiguous to Osum’s existing carbonate holdings and solidify Osum’s position in the southern part of the Grosmont trend.

This new acquisition brings Osum’s total land holdings in the Saleski region to approximately 8 1/2 gross townships (173,952 net acres) of land plus an additional 34 sections (21,920 net acres) of oil sands leases in the Cold Lake region.

Osum’s total carbonate holdings, including the newly acquired leases, are pictured here: http://media3.marketwire.com/docs/706osum.pdf

Additional imagery is available at: http://osum2015.wpengine.com/about-osum/project-areas/saleski/.

Steve Spence, Osum’s President & CEO, commented, “We are very pleased with the acquisition and what it adds to our portfolio of holdings in the region. The prospective nature of this acquisition provides Osum an opportunity to expand our already extensive resource base in a cost effective manner. This acquisition is also consistent with our strategy of targeting leases that are not only contiguous to our existing project areas but that are located in the southern portion of the Grosmont trend where existing infrastructure and access to markets make efficient commercial development more feasible.”

Mr. Spence also noted: “We continue to believe that bitumen bearing carbonates represent the next giant oil play, one which is potentially transformative with respect to the Canadian oil industry. Our first mover position and significant exposure to this trend means that Osum will be one of the greatest beneficiaries of the commercialization of this resource.”

Commercialization of the Saleski region is well underway with a carbonate SAGD pilot project currently in operations in which Osum has a 40% working interest. The results from this pilot are expected to provide valuable insights into how to best develop the Grosmont carbonate resource, which can be subsequently applied across all of Osum’s carbonate assets. To date much has been learned from the pilot. Osum is encouraged by the early results in that they have met or exceeded the Company’s expectations for the application of SAGD in the Grosmont Formation. In addition, a commercial application to expand the joint venture pilot to a 12,000 bopd commercial phase has been filed with the regulator and responses to a first round of supplemental information requests have been submitted. Osum is also planning an extensive delineation program on its 100% owned and operated Saleski holdings for this coming winter. This program will include core well drilling and 3D seismic with a goal of expanding the resource base and positioning Osum for additional near-term commercial development.

In the Company’s other core area in Cold Lake, a commercial application and Environmental Impact Assessment were filed for the 35,000 barrel per day Taiga Project in December 2009. Osum is targeting regulatory approval in late 2011 or early 2012. First oil from the Taiga Project is anticipated in 2014.

Osum’s total reserves, contingent resources and net present values (“NPV”) per GLJ’s February 2011 independent report, excluding the recently acquired lands which are still being evaluated, are as follows:

  • 359 million barrels of proved plus probable reserves with a 10% pre-tax NPV of $1.4 billion ($14.50 per fully diluted share)
  • .3 billion barrels of best estimate contingent resource with a 10% pre-tax NPV of $9.5 billion ($98.00 per fully diluted share)

ALL REFERENCES TO THE FEBRUARY 2011 GLJ ASSESSMENT REFLECT THE JANUARY 2011 GLJ ASSESSMENT FOR THE COMPANY’S RESERVE AND RESOURCE BASE AT THAT DATE, PLUS A FEBRUARY 2011 GLJ ASSESSMENT OF A PROPERTY ACQUIRED BY OSUM IN FEBRUARY 2011 – ALL USING THE GLJ JANUARY 2011 PRICE FORECAST.

About Osum
Osum is a privately held Alberta based company focused on the application of environmentally responsible in situ recovery technologies within Canada’s oil sands and carbonates. As of the end Q1 2011, Osum had approximately $197 million of net working capital and 96.1 million fully diluted shares outstanding. Additional information on the Company is available at osum2015.wpengine.com.

Cautionary Information and Forward Looking Statements
Certain statements contained in this press release may contain projections and “forward-looking statements” within the meaning of that phrase under Canadian and U.S. securities laws. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions may be used to identify forward-looking statements. Those statements reflect our current views with respect to future events or conditions, including prospective results of operations, financial position, predictions of future actions or plans or strategies.

Certain material factors and assumptions were applied in drawing our conclusions and making those forward-looking statements. By their nature, those statements reflect management’s current views, beliefs and assumptions and are subject to certain risks, uncertainties, known and unknown, and assumptions, including, without limitation, machinery development or production delays, changing environmental and other regulations, the ability to attract and retain business partners, the ability to exploit hydrocarbon resources with our technology, the need to obtain and maintain proprietary rights over our technology, competition from other technologies, the ability to access the capital required for project development, research, technology development, operations and marketing, the need to generate positive cash flow in the foreseeable future, changes in energy prices and currency levels.

Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying our projections or forward-looking statements prove incorrect, our actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated, or expected. We do not intend and do not assume any obligation to update these forward-looking statements whether as a result of new information, plans, events or otherwise.

Our securities are not traded on any stock exchange and thus, Osum is not subject to regulation by any Canadian stock exchange. Osum is not a reporting issuer in Canada and its securities are not registered under the United States Securities Act of 1933. As a result, we are not presently subject to the reporting, certification or other requirements imposed on Canadian Reporting Issuers or U.S. registered issuers under, among other things, applicable Canadian securities legislation or the U.S. Sarbanes-Oxley Act of 2002 (“SOX”).

This release is provided for information purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the common shares in any jurisdiction (including the United States) in which such offer, solicitation or sale would be unlawful.

FOR FURTHER INFORMATION:

Osum Oil Sands Corp.
Justin Robinson
Manager, Communications
jrobinson@osumcorp.com
osum2015.wpengine.com

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