Orion Project Update

We are pleased to report, despite difficult market conditions, we have found ways to honour our commitment to the Lakeland, to invest locally, and to grow our business.  We’d like to highlight a few activities, starting this summer, that will help us continue to move our business forward, while lowering our environmental impact.

We will increase steam capacity by installing a single boiler.

Our future expansion (Phase 2) at Orion includes the addition of at least two additional boilers.  We will be installing the first of these boilers in advance of the expansion to increase the steam available to our current operations.  Activities on this project will start in August and should be completed by the middle of December.

We will use a treatment unit to process more water.

We will be renting a reverse osmosis water treatment unit in November.  This project will allow us to increase our water treating capacity.  We will be treating brackish, also known as saline, water with this unit.

We will reduce waste and take trucks off the road by installing a crystallizer.

We will be installing a crystallizer to allow us to significantly reduce the waste from our evaporator water treatment process.  For those who may be unfamiliar, a crystallizer is an industrial processing unit that recovers water from a slurry waste stream, allowing its reuse.

At Orion, the Crystallizer will reduce waste water disposal by up to 80%, removing 6 trucks per day from the road on average, and recycle up to an additional 90,000m3 of water annually for re-use to generate steam.

A regulatory application will be submitted to the Alberta Energy Regulator (AER) in August 2016 for approval, with installation to occur in 2017.  We will update the community about this project as it progresses.

We will increase production by drilling new wells.

We will drill up to three new well pairs to gradually increase production through 2017 and 2018.

Media Inquiries: 
Justin Robinson jrobinson@osumcorp.com

 

Saleski Pilot Update

Operations at the Saleski pilot are being suspended pending future developments regarding the next stage of commercialization. The pilot achieved its primary objective, which was to demonstrate the potential for thermal bitumen production from the Grosmont formation.

Completion of activities is expected in October 2015.

IMPLICATIONS FOR NEXT STAGE OF DEVELOPMENT

The knowledge and experience gained through the pilot positions Osum to design a future stage of development that builds on activities to date to demonstrate the commercial production potential of the reservoir. This will be pursued when the market is supportive of these activities.

Osums current operational focus is on maximizing profitability from its Orion asset while we continue to assess optimal value creation strategies for Saleski. The Company continues to analyze and interpret data acquired from the JV Pilot for future application.

ABOUT THE SALESKI PILOT

  • Operated since December 2010 and produced over 600,000 barrels of bitumen.
  • Included 5 producing wells.
  • A number of design modifications and experiments were applied throughout the pilot life-cycle, including the transition from SAGD to cyclic operations

ABOUT THE GROSMONT FORMATION

  • Osum holds over 4 Billion barrels (Net) of Best Estimate Contingent Resources in the Grosmont formation (GLJ Petroleum Consultants. Saleski properties as at December 31, 2014).
  • The Alberta Energy Regulator estimates that the Grosmont holds over 406 Billion barrels of oil in place.
  • The Sepiko Kesik project, directly adjacent to the pilot, is wholly-owned by Osum and will be the first large-scale commercial project in the Grosmont Formation. In early 2013, Osum submitted an Environmental Impact Assessment (EIA) and commercial application for the Sepiko Kesik project.

MEDIA INQUIRIES

Justin Robinson
jrobinson@osumcorp.com

Osum Oil Sands Corp. Acquires Orion Oil Sands Project and Closes Senior Secured Credit Facilities

CALGARY, ALBERTA — (July 31, 2014) – Osum Oil Sands Corp. (“Osum” or the “Company”), a private in-situ oil sands company, today announced that its wholly-owned subsidiary, Osum Production Corp. (“OPC”), has completed the purchase of the Orion Oil Sands Project from Shell Canada (a Royal Dutch Shell Group entity) for Canadian $325 million.

Commenting on the success of the acquisition, Steve Spence, President and Chief Executive Officer, said: “The acquisition of the Orion project provides Osum with significant current production and cash flow. As well, we are pleased to welcome the high quality, experienced operating team members joining our organization today. We believe Osum has a unique opportunity to build a significant production platform from both Orion and our neighboring Taiga project in the Cold Lake region.”

The acquisition was funded from cash on hand and with the net proceeds of a new US$210 million Senior Secured Term Loan Facility to OPC (the “Term Loan Facility”). The Term Loan Facility has a maturity date of July 31, 2020 and an interest rate of LIBOR plus 5.50% with a 1.00% LIBOR floor. In addition, OPC has access to a US$15 million Senior Secured Revolving Loan Facility for general corporate purposes (the “Revolving Loan Facility”). Barclays Bank PLC and Goldman Sachs Lending Partners LLC acted as Joint Lead Arrangers and Joint Bookrunners for each of the Term Loan Facility and the Revolving Loan Facility.

Acquisition Highlights:

  • The Orion Project is located in the Cold Lake oil sands region, in close proximity to numerous major oil sands developments. It is approximately 18 kilometers SW of Osum’s Taiga Project, which has received regulatory approval for the construction and operation of a 35,000 barrel per day facility.
  • The Project has been producing commercially since 2007 using the well-established Steam Assisted Gravity Drainage (SAGD) thermal heavy oil recovery technology.
    • Second quarter production averaged approximately 6,800 barrels per day of bitumen from 22 well pairs. At forecast production rates, the Project is expected to have an economic life in excess of 25 years.
  • Osum has 100% working interest and operatorship of the project.
  • CIBC World Markets Inc., Barclays Capital Canada Inc., and Goldman Sachs Canada Inc. acted as financial advisors to Osum in respect of the acquisition.

About Osum

Established in Alberta in 2005, Osum Oil Sands Corp. is a private oil sands producer focused on the responsible application of in-situ recovery technologies within Canada’s oil sands and carbonates. Additional information on the Company is available at www.osumcorp.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 management’s current views with respect to future events or conditions, including expected cash flows, expected production levels, and expected economic life of the Orion Oil Sands Project, retaining a high quality, experienced operating team, financial position, predictions of future actions or plans or strategies.

Certain material factors and assumptions were applied in drawing conclusions and making 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, assumptions about expected cash flows, expected production levels, and expected economic life of the Orion Oil Sands Project, retaining a high quality, experienced management team, production delays, changing environmental and other regulations, the ability to attract and retain business partners, the ability to exploit hydrocarbon resources with available technology, the need to obtain and maintain proprietary rights over aspects of the technology, competition from other technologies, the ability to access the capital required for project development, research, technology development, operations and marketing, changes in energy prices and currency levels.

Many factors could cause 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 the projections or forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated, or expected. Osum does not intend and does not assume any obligation to update these forward-looking statements whether as a result of new information, plans, events or otherwise.

The Company’s 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, the Company is 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.

Contact Information 

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

Osum Oil Sands Corp. Acquires Orion Oil Sands Project

CALGARY, ALBERTA (06/10/2014) — Osum Oil Sands Corp. (“Osum” or the “Company”), a private in-situ oil sands company, today announced that it has entered into an agreement to purchase the Orion Oil Sands Project from Shell Canada (a Royal Dutch Shell Group entity) for Canadian $325 Million (subject to customary purchase price adjustments and certain closing conditions). The transaction is expected to close on or about July 31, 2014.

Commenting on the acquisition, Steve Spence, President and Chief Executive Officer, said: “The Orion Project is a first class operation that will provide Osum with significant current production and cash flow. Our immediate focus is on ensuring a safe and smooth transition of operations. In the longer term we believe that by linking Orion together with our nearby Taiga Project, Osum has a unique opportunity to build a significant production platform in the Cold Lake region.”

In connection with the transaction, Osum has obtained financing commitments from Barclays Bank PLC and Goldman Sachs Lending Partners LLC for Senior Secured Credit Facilities totaling US$225 million. The balance of the purchase will be funded from cash on hand as well as from existing shareholders.

Acquisition Highlights:
  • The Orion Project is located in the Cold Lake oil sands region, in close proximity to numerous major oil sands developments. It is approximately 18 kilometers SW of Osum’s Taiga Project, which has received regulatory approval for the construction and operation of a 35,000 barrel per day facility.
  • The Project has been producing commercially since 2007 using the well-established Steam Assisted Gravity Drainage (SAGD) thermal heavy oil recovery technology.
  • First quarter production averaged approximately 6,700 barrels per day of bitumen from 22 well pairs. At forecast production rates, the Project is expected to have an economic life in excess of 25 years.
  • Osum will have 100% working interest and operatorship of the project.
About Osum

Established in Alberta in 2005, Osum Oil Sands Corp. is a private oil sands producer focused on the responsible application of in-situ recovery technologies within Canada’s oil sands and carbonates. Additional information on the Company is available at www.osumcorp.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 management’s current views with respect to future events or conditions, including the closing date of the acquisition with Shell Canada, expected cash flows, expected production levels, and expected economic life of the Orion Oil Sands Project, financial position, predictions of future actions or plans or strategies.

Certain material factors and assumptions were applied in drawing conclusions and making 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, assumptions about the closing date of the acquisition with Shell Canada, expected cash flows, expected production levels, and expected economic life of the Orion Oil Sands Project ,production delays, changing environmental and other regulations, the ability to attract and retain business partners, the ability to exploit hydrocarbon resources with available technology, the need to obtain and maintain proprietary rights over aspects of the technology, competition from other technologies, the ability to access the capital required for project development, research, technology development, operations and marketing , changes in energy prices and currency levels.

Many factors could cause 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 the projections or forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated, or expected. Osum does not intend and does not assume any obligation to update these forward-looking statements whether as a result of new information, plans, events or otherwise.

The Company’s 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, the Company is 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.

Inquiries:

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

Press Release by Osum Oil Sands Corp.

Calgary, Alberta – In a press release issued on March 13, 2013, Osum Oil Sands Corp. (“Osum” or “the Company”) announced the results of its December 31, 2012 independent reserves and resources evaluation. The evaluation was prepared by GLJ Petroleum Consultants Ltd. (“GLJ”), a leading independent reserve evaluator engaged to evaluate all of Osum’s project areas in accordance with National Instrument 51-101 (“NI 51-101”) and the Canadian Oil and Gas Evaluation Handbook (“COGEH”). The result was a report (“the GLJ Report”) that assigned a total of 4.4 billion barrels of best estimate contingent resources and 410 million barrels of probable undeveloped reserves to the Company’s properties. The estimate of probable undeveloped reserves included 51 million barrels in the Grosmont carbonates assigned to a portion of the Company’s acreage in its Saleski Joint Venture project area (“the Saleski JV Reserves”).

Subsequent to the date of the GLJ Report, on May 29, 2013, the Alberta Securities Commission (“ASC”) issued Staff Notice 51-702 (the “Staff Notice”) in respect of the certainty levels associated with the estimation and classification of oil and gas reserves and resources based on ASC staff’s interpretation of COGEH. Osum is consulting with GLJ to understand the implications of the Staff Notice, including the potential effect on future evaluations. However, based on management’s preliminary understanding, ASC staff’s interpretation as set out in the Staff Notice could result in the reclassification of the Saleski JV Reserves (12% of the Company’s total reserves) to best estimate contingent resources. The Staff Notice has no bearing on the Company’s remaining 359 million barrels of probable undeveloped reserves, or its 4.4 billion barrels of best estimate contingent resources.

About Osum Oil Sands

Osum Oil Sands Corp. 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. Additional information on the Company is available at www.osumcorp.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 management’s current views with respect to future events or conditions, including prospective results of operations, petroleum reserves and resources, changes to legislation or policy, actions by the ASC, conclusions of management concerning the Staff Notice, financial position, predictions of future actions or plans or strategies.

Certain material factors and assumptions were applied in drawing conclusions and making 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, assumptions about possible future legislation, policy and actions by the ASC in connection with the statements in the Staff Notice or otherwise, 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 available technology, the need to obtain and maintain proprietary rights over aspects of the 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 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 the projections or forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated, or expected. Osum does not intend and does not assume any obligation to update these forward-looking statements whether as a result of new information, plans, events or otherwise.

The Company’s 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, the Company is 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”).

Under NI 51-101, proved reserves are those reserves which can be estimated with a high degree of certainty to be recoverable. It is 90 percent likely that actual remaining quantities will exceed estimated proved reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of proved plus probable reserves. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is only a 10 percent probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. Contingent Resources are further classified in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterized by their economic status. Resource estimates are described as follows: Best Estimate – This is considered to be the best estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.; High Estimate – This is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate.; Low Estimate – this is considered to be a conservative estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used, the term reflects a P90 confidence level.

Contingent resources were assigned in regions with lower core-hole drilling density than the reserve regions and are outside current areas of application for development. These resource estimates are not classified as reserves at this time, pending further reservoir delineation, project application, facility and reservoir design work. Contingent resources entail commercial risk not applicable to reserves, which have not been included in the net present valuation. There is no certainty that it will be commercially viable to produce any portion of the contingent resources. All heavy oil volumes reported herein refer to bitumen.

In the GLJ Report a portion of the recoverable bitumen volumes in the Taiga-Cold Lake and Saleski Joint Venture properties, where the Company or its partner has applied for construction of bitumen recovery schemes, are classified as reserves. The remaining recoverable bitumen volumes are classified as contingent or prospective resources, not reserves, pending further delineation, facility design, regulatory application, firm development plans and Company approvals. In the case of the carbonate properties other than the area of the Saleski Joint Venture to which reserves are assigned, development also may be contingent upon successful application of steam assisted gravity drainage (SAGD) or cyclic steam stimulation (CSS) technology in those carbonate reservoirs. The contingent and prospective resources have been assessed using the same fiscal conditions applicable in the assessment of reserves and, as such, these volumes are considered economically recoverable. There is however, no certainty that it will be commercially viable to produce any of the contingent or prospective resources.

In determining the valuation estimates contained in the GLJ Report, the following pricing forecast was utilized:

GLJ Forecast Pricing
Forecast
Light and Medium Crude Oil
Exchange Rate
WSC Stream Quality at Hardisty Current
Natural Gas
Inflation Rate
WTI at Cushing Oklahoma
(US$/bbl)
US$/Cdn$
(Cdn$/bbl)
Alberta Spot at Plant
Gate (Cdn$/mmbtu)
%/year
2013
90.00
1.000
70.13
3.19
2%
2014
92.50
1.000
76.15
3.63
2%
2015
95.00
1.000
78.22
4.08
2%
2016
97.50
1.000
80.29
4.53
2%
2017
97.50
1.000
80.29
4.75
2%
2018
97.50
1.000
80.29
5.02
2%
2019
98.54
1.000
81.16
5.12
2%
2020
100.51
1.000
82.79
5.22
2%
2021
102.52
1.000
84.46
5.33
2%
2022
104.57
1.000
86.16
5.44
2%
2023+
+2%/yr
1.000
+2%/yr
+2%/yr
2%

 

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 of the Company in any jurisdiction (including the United States) in which such offer, solicitation or sale would be unlawful.

Inquiries:

Christi Millar
Communications Advisor
cmillar@osumcorp.com

Osum supports professional development for high school science teachers in the Lakeland

Cold Lake, AB – As part of Osum’s ongoing commitment to foster student interest in science and innovation, nineteen teachers from the Lakeland will be leaving on Thursday to attend the National Science Teacher Association’s 2013 National Conference in San Antonio, Texas.  The theme of this year’s conference is Next Generation Science: Learning, Literacy and Living.  Members of the science teams at Assumption Jr/Sr High School, Bonnyville Centralized High School, Cold Lake High School (CLHS) and Notre Dame High School will all be participating in the trip.

“Teachers at each of these schools share Osum’s enthusiasm and dedication for sparking the next generation of scientists,” said Justin Robinson, Communications Manager.  “Attendance at this conference will equip them with new teaching strategies and the latest approaches to help students dig deeper into science.”

For the past four years, Osum and the Cold Lake High School science department have partnered to promote student interest in science and innovation.  The partnership was showcased at last year’s Canadian Association of School Administrators conference in Whistler, British Columbia and at the Alberta Science Teachers Association’s conference in Banff as an example of how schools and businesses can form meaningful alliances that involve the community and make a difference in students’ lives.

Some examples of what the partnership has involved include:

  • field trips for students and staff,
  • a solar panel demonstration project, and
  • the Osum Innovation Challenges, where students have worked with world-class athletes, scientists, and business experts to push their innovation skills to new heights.

“By expanding our focus to include four high school science teams in the Lakeland, we are championing a dialogue that emphasizes passion for science and innovation across the region,” said Justin Robinson, Communications Manager. “Teachers from all schools will return to the community empowered and energized in their mission to enable their students to create the scientific breakthroughs of the future.”

Plans to further advance a culture of science and innovation are underway and are to be announced later in 2013.

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. Additional information on the Company is available at www.osumcorp.com.

For more information:
Christi Millar
Communications Advisor
cmillar@osumcorp.com

 

 

Osum Achieves the First Reserve Booking in the Grosmont Carbonates and Records an 821 Million Barrel Increase in Best Estimate Contingent Resource

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.

Osum Oil Sands Corp. (“Osum” or the “Company”), a private in-situ oil sands developer, is pleased to announce the results of its December 31, 2012 reserve and resource assessment (“GLJ Report”).  GLJ Petroleum Consultants (“GLJ”) was engaged as an independent qualified reserve evaluator to evaluate all of Osum’s project areas in accordance with National Instrument 51-101 (“NI 51-101”) and the Canadian Oil and Gas Evaluation Handbook (“COGEH”) as part of the year-end reserves and resource evaluation.

Assessment Highlights

  • 4.4 billion barrels of  best estimate contingent resources (P50), an increase of 821 million barrels over the prior year
  • 410 million barrels of probable reserves including 51 million barrels assigned to the Saleski Joint Venture project area
  • In excess of 500,000 barrels per day of total long-term sustained production potential

Reserves in the Carbonates

“The booking of reserves at Saleski represents a material milestone on the path to commercializing the Grosmont carbonates,” said Steve Spence, President & CEO of Osum. “This third-party expert recognition of the commerciality of the resource is supported by the positive results that we have seen from the Saleski pilot where commercial level operating results have been repeated over a number of production cycles.”

The assignment of reserves by GLJ is the first reserve booking in the Grosmont carbonates in Alberta and applies to both the Grosmont C and D reservoirs in the initial development area for the 10,700 barrels per day commercial demonstration project. The Grosmont C and D reservoirs extend into Osum’s 100% operated project area at Saleski East while the Grosmont D comprises a significant portion of the contingent resource in the 100% operated Saleski West project area.  Saleski East and West bracket the joint venture lands.

Saleski Projects

At the Saleski Joint Venture project, the 10,700 barrels per day (gross) commercial demonstration project (Phase 1) continues to advance. A project update was filed with the ERCB in 2012 to incorporate a single-well cyclic steam-assisted gravity drainage process and regulatory approval is targeted for mid-2013. Engineering is ongoing and orders for certain long lead equipment have been advanced. Osum is fully funded for its 40% share of the cost to construct the commercial demonstration project. First oil from the project is anticipated in late 2015 assuming a 2013 final investment decision.

Earlier this quarter, the Company submitted an Environmental Impact Assessment (“EIA”) and commercial application for the 60,000 barrels per day 100% operated Sepiko Kesik project at Saleski East. Regulatory approval for the project is targeted for 2014. The Company will monitor progress at the Saleski Joint Venture pilot and commercial demonstration project before making the final decision on ultimate timing of the first phase of Sepiko Kesik. To obtain a copy of the EIA please visit Osum’s website at www.osumcorp.com/sepikokesikeia.

At Saleski West and Liege West the Company is nearing completion of a 15 well delineation program with a goal of further expanding the resource in those regions. Liege West has not been delineated to date and therefore this year’s drilling program provides the opportunity to further add to the Company’s resource base and project portfolio.

Taiga

In the Company’s other core area in Cold Lake, regulatory approval for the initial phases of the 45,000 barrel per day Taiga Project was received in October 2012. The Company is in the process of finalizing the execution strategy for Taiga including timing and means of financing the first phase of the project.

Summary of GLJ Report

A detailed pro forma breakdown of Osum’s total reserves, resources, and net asset values as assessed by GLJ as of December 31, 2012 is provided below:

Reserves and Resources
Asset
Proved Reserves
(1P)
(MMbbl)
Proved plus Probable Reserves (2P) (MMbbl)
Proved plus Probable
plus
Possible Reserves (3P)(MMbbl)
Cold Lake
359
525
Saleski JV
51
74
Saleski East
Saleski West
Liege Other
410
599
Resources
Asset
Best Estimate Contingent Resources (MMbbl)
Cold Lake
104
Saleski JV
1,079
Saleski East Saleski West
906
1,470
Liege
570
Other
234
 
4,363
Corporate Total
Low Estimate Contingent
662
Best Estimate Contingent
4,363
High Estimate Contingent
8,050

Net Present Value
Pre-tax (MM$, 8%)
Pre-Tax (MM$, 10%)
2P Reserves
$1,752
$1,116
3P Reserves
$2,658
$1,710
Low Estimate Contingent
$2,365
$1,362
Best Estimate Contingent
$18,000
$11,097
High Estimate Contingent
$42,147
$27,035

 

The reserve and resource estimates herein were extracted from reports prepared by GLJ, an independent professional petroleum engineering firm, in accordance with Canadian Securities Administrators’ National Instrument 51-101 (NI 51-101) and the Canadian Oil and Gas Evaluation Handbook.

Under NI 51-101, proved reserves are those reserves which can be estimated with a high degree of certainty to be recoverable.  It is 90 percent likely that actual remaining quantities will exceed estimated proved reserves.  Probable reserves are those additional reserves that are less certain to be recovered than proved reserves.  It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of proved plus probable reserves.  Possible reserves are those additional reserves that are less certain to be recovered than probable reserves.  There is only a 10 percent probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies.  Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets.  Contingent Resources are further classified in accordance with the level of certainty associated with the estimates and may be subclassified based on project maturity and/or characterized by their economic status.  Resource estimates are described as follows: Best Estimate – This is considered to be the best estimate of the quantity that will actually be recovered from the accumulation.  If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.; High Estimate –  This is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate.  If probabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate. Low estimate – this is considered to be a conservative estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used, the term reflects a P90 confidence level.

Contingent resources were assigned in regions with lower core-hole drilling density than the reserve regions and are outside current areas of application for development. These resource estimates are not classified as reserves at this time, pending further reservoir delineation, project application, facility and reservoir design work. Contingent resources entail commercial risk not applicable to reserves, which have not been included in the net present valuation. There is no certainty that it will be commercially viable to produce any portion of the contingent resources. All heavy oil volumes reported herein refer to bitumen. A portion of the recoverable bitumen volumes in the Taiga-Cold Lake and Saleski Joint Venture Properties, where the Company has applied for construction of bitumen recovery schemes, are classified as reserves. The remaining recoverable bitumen volumes are classified as resources, not reserves, pending further delineation, facility design, regulatory application, firm development plans and Company approvals. In the case of the carbonate properties development is also contingent upon successful application of steam assisted gravity drainage (SAGD) or cyclic steam stimulation (CSS) technology in carbonate reservoirs, which is currently under active development including an operational pilot at Saleski Joint Venture. The contingent and prospective resources have been assessed using the same fiscal conditions applicable in the assessment of reserves and, as such, these volumes are considered economically recoverable. There is however, no certainty that it will be commercially viable to produce any of the contingent or prospective resources.

In determining the valuation estimates contained in the reports prepared by GLJ, the following pricing forecast was utilized:

GLJ Forecast Pricing
Forecast
Light and Medium Crude Oil
Exchange Rate
WSC Stream Quality at Hardisty Current
Natural Gas
Inflation Rate
WTI at Cushing Oklahoma
(US$/bbl)
US$/Cdn$
(Cdn$/bbl)
Alberta Spot at Plant
Gate (Cdn$/mmbtu)
%/year
2013
90.00
1.000
70.13
3.19
2%
2014
92.50
1.000
76.15
3.63
2%
2015
95.00
1.000
78.22
4.08
2%
2016
97.50
1.000
80.29
4.53
2%
2017
97.50
1.000
80.29
4.75
2%
2018
97.50
1.000
80.29
5.02
2%
2019
98.54
1.000
81.16
5.12
2%
2020
100.51
1.000
82.79
5.22
2%
2021
102.52
1.000
84.46
5.33
2%
2022
104.57
1.000
86.16
5.44
2%
2023+
+2%/yr
1.000
+2%/yr
+2%/yr
2%

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. Additional information on the Company is available at www.osumcorp.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 of the Company in any jurisdiction (including the United States) in which such offer, solicitation or sale would be unlawful.

Inquiries:

Christi Millar
Communications Advisor
cmillar@osumcorp.com

 

Actress Mayim Bialik talks creativity and neuroscience to students at Cold Lake High School

Cold Lake, Alberta– Science students at Cold Lake High School will have the opportunity to hear from Mayim Bialik today.  Speaking to students from Los Angeles via videoconference, Mayim will share her experiences as both an actress and an academic.  Similar to her character, Dr. Amy Farrah Fowler, who holds a doctorate in neuro-biology on the TV series The Big Bang Theory, Bialik has a doctorate in neuroscience.

Bialik earned a BS from UCLA in 2000 in Neuroscience and Hebrew and Jewish Studies, and went on to the Ph.D. program in Neuroscience, also at UCLA. She completed her doctorate in the fall of 2007, which examined Obsessive-Compulsive Disorder in adolescents with Prader-Willi syndrome.

Bialik’s appearance is part of the ongoing science partnership between Osum Oil Sands Corp and the Cold Lake High School, which aims to open students’ imagination and promote their interest in science and innovation.

“Today’s students are the leaders of tomorrow and we want to find creative ways to get students excited about science and future career opportunities,” commented Justin Robinson, Communications Manager at Osum.  “Mayim has a great story – plus is quite well known for her role on The Big Bang Theory – so we think she is the perfect person to introduce the students to the world of neuroscience and get them thinking about the possibilities that a career in science could represent for them.”

The science partnership has involved everything from fieldtrips for students and staff to a solar panel demonstration project on the roof of the school. Some of the most memorable experiences have come out of the Osum Innovation Challenges – special events where students have the opportunity to hear from world-class speakers with inspiring messages and push their innovation skills to new heights.

About Osum

Osum’s mission is to unlock Canada’s unrealized bitumen resource potential. The Company is pursuing commercial in situ developments in the established Cold Lake area of Alberta and in the Grosmont carbonate trend, where it is a leader with a stake in a producing pilot and plans for the first full scale project in the region. The company has been assigned proven plus probable reserves of 359 Million barrels and Best Estimate Contingent Resources of 3.54 Billion barrels.

For further information, please contact:

Osum Oil Sands Corp.
Christi Millar
Communications Advisor
cmillar@osumcorp.com

www.osumcorp.com

Rick George Appointed Chairman of Osum Oil Sands

CALGARY, Alberta (November 5, 2012)

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.

Osum Oil Sands Corp (“Osum” or “the Company”) is pleased to announce that Mr. Richard L. (Rick) George, OC, has been appointed Chairman of the Board of Directors of the Company. Rick was the President and CEO of Suncor Energy from 1991 until 2012 and is widely regarded as one of the pioneers of Canada’s Oil Sands. Under Rick’s leadership, Suncor grew from a valuation of $1 billion to a market capitalization of more than $50 billion, making it Canada’s largest energy company and one of the top five publicly traded companies in the country.

“We are extremely happy to welcome Rick George to our Board of Directors.” commented Steve Spence, Osum’s President & CEO. “His deep understanding of the oil sands sector and wealth of experience gained from building a successful, world class energy company are unmatched. Rick will provide unique and invaluable insights as we develop our assets, both in Cold Lake with our Taiga project and in the Saleski carbonates.”

During his twenty-one years as Chief Executive Officer, Suncor was consistently a leader in resource capture and development and was known for recognizing opportunity ahead of its peers. An example of this was the company’s decision to aggressively invest in oil sands development in the late 1990’s when oil prices were approaching $10 per barrel and expected to fall further.

In recognition of his exemplary leadership and vision, Mr. George has received a myriad of awards. Among them are Canada’s Outstanding CEO (1999), Canadian Business Leader Award (2000), Alberta Business Person of the Year (2001),and Officer of the Order of Canada (2007) for his contribution to Canada’s energy resource development.

“I look forward to this opportunity to work alongside Osum’s exceptional management team and board of directors.” Mr. George stated. “Osum has positioned itself at the forefront of what I believe is the next significant chapter in Canada’s in situ oil sands – the Saleski Grosmont carbonates. I am excited that I will be playing a part in the commercialization of this vast resource and will have a role in building a company that I expect will become a leader in the industry.”

Mr. George also serves as a director on the boards of Anadarko Petroleum Corporation and the Royal Bank of Canada.

Osum and its Board of Directors would also like to extend a gracious thank you to Mr. Richard Todd, who stepped down from Osum’s board to allow Mr. George to join. Mr. Todd was CEO and Chairman of Osum from 2006 to 2010 and then a director from 2010 to present. Mr. Todd played a vital and integral leadership role in bringing Osum from a virtual standing start to the thriving development company that it is today.

Osum continues to advance its asset portfolio of 3.5 billion barrels of best estimate contingent resource and 359 million barrels of proved and probable reserves toward commercial development. The initial phases of the 45,000 barrel per day Taiga Project in the Cold Lake area received regulatory approval from the Energy Resources Conservation Board in September of this year and preparation for the initial commercial phase is well underway with first production expected by 2016. At Saleski, the thermal pilot in the carbonates continues to show positive results and planning for its expansion with a 10,700 barrel per day (gross) commercial demonstration stage is nearing completion with sanction expected in 2013. In addition, filing of an Environmental Impact Assessment for Osum’s 100% owned and operated 60,000 barrel per day commercial project at Saleski East is expected to be filed with the regulators in early 2013. In total, Osum’s asset base at Cold Lake and Saleski has the potential to support projects producing 390,000 barrel per day.

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. Additional information on the Company is available at www.osumcorp.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.

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 in Canada and thus, Osum is not subject to regulation by any Canadian stock exchange. Our securities are also not registered under the United States Securities Act of 1933 nor are they traded on any securities or stock exchange in the United States. As a result, we are not presently subject to the reporting, certification or other requirements imposed on U.S. registered issuers under, among other things, 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.

Media Contact

Christi Millar
Communications Advisor
cmillar@osumcorp.com

Osum’s Taiga Project Receives Approval from the ERCB

Calgary – Following a comprehensive review by the Energy Resources Conservation Board (ERCB), Osum Oil Sands Corp (Osum) has received notice that the Company’s application for the development of a 35,000 barrel per day 100% owned thermal project at Cold Lake (Taiga) has been approved. The Taiga project has been assigned 359 million barrels of proved plus probable reserves.

“Regulatory approval of the Taiga Project is a significant milestone for Osum on our path to full-scale operated commercial production.” said Steve Spence, Osum’s President & Chief Executive Officer. “Taiga is about unlocking the potential of people, communities and resources, and this news moves us one step closer to doing exactly that.”

With regulatory approval now in hand, the timing of development is under evaluation.

The construction of Taiga will require additional sources of financing and Osum is currently evaluating funding alternatives that will position the project for approval by Osum’s Board.

The application goes next to the Lieutenant Governor in Council for final approval.

About Taiga
The Taiga Project is located in the prolific Cold Lake region of Alberta adjacent to some of the largest thermal projects in Canada. The project has been assigned 359 million barrels of proved plus probable reserves and 105 million barrels of best estimate contingent resource, which may support up to 45,000 barrels per day of production for over 30 years.

For more information on the Taiga Project, visit our website at www.osumcorp.com

About Osum
Osum’s mission is to unlock Canada’s unrealized bitumen resource potential. The Company is pursuing commercial in situ developments in the established Cold Lake area of Alberta and in the Grosmont carbonate trend, where it is a leader with a stake in a producing pilot and plans for the first full scale development in the region. The Company has been assigned proven plus probable reserves of 359 Million barrels and Best Estimate Contingent Resources of 3.54 Billion barrels.

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.

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 in Canada and thus, Osum is not subject to regulation by any Canadian stock exchange. Our securities are also not registered under the United States Securities Act of 1933 nor are they traded on any securities or stock exchange in the United States. As a result, we are not presently subject to the reporting, certification or other requirements imposed on U.S. registered issuers under, among other things, 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.

Disclosure of Reserves and Resources

Instrument 51-101 (NI 51-101) and the Canadian Oil and Gas Evaluation Handbook.

Under NI 51-101, proved reserves are those reserves which can be estimated with a high degree of certainty to be recoverable. It is 90 percent likely that actual remaining quantities will exceed estimated proved reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of proved plus probable reserves. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is only a 10 percent probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. Contingent Resources are further classified in accordance with the level of certainty associated with the estimates and may be sub classified based on project maturity and/or characterized by their economic status. Resource estimates are described as follows: Best Estimate – This is considered to be the best estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.; High Estimate – This is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate. Low estimate – this is considered to be a conservative estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used, the term reflects a P90 confidence level. Contingent resources were assigned in regions with lower core-hole drilling density than the reserve regions and are outside current areas of application for development. These resource estimates are not classified as reserves at this time, pending further reservoir delineation, project application, facility and reservoir design work. Contingent resources entail commercial risk not applicable to reserves, which have not been included in the net present valuation. There is no certainty that it will be commercially viable to produce any portion of the contingent resources.

Media Contact:

Christi Millar
Communications Advisor
cmillar@osumcorp.com