Osum set to double production at Orion Project with acceleration of phased expansion plan

CALGARY, ALBERTA (January 8, 2018) – Osum Oil Sands Corp. (“Osum” or the “Company”), a private oil sands company, is pleased to announce the commencement of the Phase 2C expansion at its Orion Thermal Project (“Orion Project” or “Orion”), located in the Cold Lake oil sands region of Alberta.

The Phase 2C expansion will be executed concurrently with the Phase 2B expansion that was announced in October 2017 and will be funded from cash on hand and with cash flow. When completed, the two phases will increase total production capacity to over 18,000 barrels per day. Osum is currently producing in excess of 9,000 barrels per day at the Orion Project.

Commenting on the expansion, Steve Spence, President and CEO of Osum said, “We are on a clear path to double production by the end of 2019, moving us closer to our goal of producing 20,000 barrels per day at Orion.  This production growth will provide significant operating cost savings on a per barrel basis – further strengthening project returns and positioning the Company for sustainable growth in a moderate oil price environment.”

A phased expansion strategy was initiated in late 2016, as follows:

 

Phase Timing (Steam in) Added Capacity
2A Completed September 2017 1,500 barrels per day
2B Completion mid-2018 3,000 barrels per day
2C Completion Q4 2018 6,000 barrels per day
2D TBD 2,000 barrels per day

Osum also has regulatory approval for its 35,000 barrels per day Taiga Project, a greenfield development located less than twenty kilometers from Orion.

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”, “project” and similar expressions, may be used to identify forward-looking statements. Forward-looking statements in this press release may include, but are not limited to, statements regarding production from the Phase 2A expansion, timing and completion of the Phase 2B and Phase 2C expansions, the anticipated production from the Phase 2B, Phase 2C and Phase 2D expansions and the anticipated cost operating cost savings from the expansions. 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 or conditions, and expected economic life of the Orion Project, retaining a high quality, experienced management and operating 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, financial position, predictions of future actions or plans or strategies, 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, projected 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, except as required by law.

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 anywhere 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 reporting issuers in Canada or U.S. securities legislation including U.S. registered issuers under, among other things, applicable Canadian securities legislation or the U.S. Sarbanes-Oxley Act of 2002. 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:
Osum Oil Sands Corp.
Christi Clouter
cclouter@osumcorp.com

William A. Friley Appointed Chairman of Osum Oil Sands Corp.

Osum Oil Sands Corp. (Osum) is pleased to announce that long-time board member, William A. (Bill) Friley, has been appointed Chairman of the Board of Directors.

Commenting on the appointment, Steve Spence, President and CEO of Osum, said, “We are extremely happy that Bill has taken on the role of Chairman. Bill joined the Osum Board in 2007 and has provided invaluable insight and guidance as we’ve acquired and progressed our Cold Lake and Saleski carbonate assets. I look forward to working closely with Bill as we move through this exciting period of growth and as we work to deliver on our long term business strategy.”

Mr. Friley is a geologist by training, who brings over 35 years of exploration and production business expertise and a deep knowledge of the western Canadian sedimentary basin. He was founder, President, CEO and Chairman of Triumph Energy Corp., a TSX-listed oil and gas exploration company, from 1993-2001. He is also past Chair of the Canadian Association of Petroleum Producers. Currently Mr. Friley is President and CEO of Telluride Oil and Gas Ltd. and Skyeland Oils Ltd. and serves on the boards of Obsidian Energy Ltd., Titan Energy Services Ltd. and Advanced Flow Technologies Inc.

Osum Moving Forward with Expansion at Orion and Announces Closing of a Royalty Sale

CALGARY, ALBERTA (October 2, 2017) — Osum Oil Sands Corp. (“Osum” or the “Company”), a private oil sands company, is pleased to announce that it has approved the commencement of the Phase 2B expansion at its Orion Thermal Project (“Orion Project” or “Orion”). In conjunction with this, Osum, through its wholly-owned subsidiary, Osum Production Corp., sold a 4 percent gross overriding royalty interest on its Orion Project (the “Royalty Interest”) for cash proceeds of $92.5 million, before transaction costs. The sale has an effective date of September 1, 2017.

The Phase 2B expansion will be funded from a portion of the proceeds of the sale of the Royalty Interest. The Royalty Interest covers current and any future expansions of the Orion Project. TD Securities Inc. acted as Osum’s exclusive financial advisor on the sale.

Orion is currently producing 7,500 – 8,000 barrels per day of bitumen from the Clearwater Formation in the Cold Lake oil sands region, about 200 km north east of Edmonton, Alberta. The just completed Phase 2A expansion is expected to add 1,500 barrels per day of production over the next twelve months. The Phase 2B expansion is projected to be completed in mid-2018 and is expected to increase production progressively through mid-2019 by an additional 3,000 barrels per day. The Orion Project has regulatory approval for production of up to 20,000 barrels per day.

Commenting on the planned expansion and the sale of the Royalty Interest, Steve Spence, President and CEO of Osum said, “We are on a clear path for positive growth over the next two years. The sale of the royalty enables us to accelerate our staged expansion strategy, moving us closer to our goal of producing 20,000 barrels per day from Orion. By taking a measured approach to adding capacity, we are building an oil sands business that is robust, and can grow sustainably in a moderate oil price environment.”

Concurrent with the royalty sale process, Osum engaged GLJ Petroleum Consultants (“GLJ”) as an independent qualified reserve evaluator to conduct a reserves and resource assessment in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (“GLJ Report”), taking into account new well data and project performance since GLJ’s last update on December 31, 2016. This has resulted in volume increases of more than 25% in the Company’s gross proved (“1P”) reserves and 5% in gross proved plus probable (“2P”) reserves. The GLJ Report has an effective date of September 1, 2017.

The following table displays gross bitumen reserves and bitumen reserves net of forecast royalties, inclusive of the Royalty Interest, along with the present values of estimated future net revenue using a range of discount rates at September 1, 2017:

Bitumen Reserves
– (Mbbl)
Net Present Value of Future Net Revenue
– Before Taxes ($millions)
Forecast Prices and Costs
Gross
Net
0%
5%
10%
15%
20%
Total proved (1P)
60,138
49,697
1,064
690
471
336
250
Total probable
477,272
391,715
10,011
3,768
1,540
622
198
Total proved plus probable (2P)
537,410
441,412
11,075
4,458
2,011
958
448

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.

Reserves and Resources
The reserve estimates herein were extracted from the GLJ Report, which was prepared in accordance with resources and reserves definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (“COGEH”). Reserves are classified according to the degree of certainty associated with the estimates. Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the 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 the estimated proved plus probable reserves. Other criteria that must also be met for the categorization of reserves are provided in the COGEH.

The qualitative certainty levels referred to in the definitions above are applicable to individual reserve entities (which refers to the lowest level at which reserves calculations are performed) and to reported reserves (which refers to the highest level sum of individual entity estimates for which reserve estimates are prepared). Reported reserves should target the following levels of certainty under a specific set of economic conditions: (a) at least a 90 percent probability that the quantities actually recovered will equal or exceed the estimated proved reserves; and (b) at least a 50 percent probability that the quantities actually recovered will equal or exceed the estimated proved plus probable reserves. A qualitative measure of the certainty levels pertaining to estimates prepared for the various reserves categories is desirable to provide a clearer understanding of the associated risks and uncertainties. However, the majority of reserves estimates will be prepared using deterministic methods that do not provide a mathematically derived quantitative measure of probability. In principle, there should be no difference between estimates prepared using probabilistic or deterministic methods. Additional clarification of certainty levels associated with reserves estimates and the effect of aggregation is provided in the COGEH.

The preparation of an evaluation requires the use of judgement in applying the standards and definitions contained in the COGEH. As the Company’s independent reserve evaluator, GLJ applies those standards and definitions based on its experience and knowledge of industry practice. However, because the application of the standards and definitions contained in the COGEH require the use of judgement there is no assurance that governing securities regulator(s) will not take a different view than GLJ as to some of the determinations in an evaluation.

In determining the valuation estimates contained in the GLJ Report, the following GLJ pricing forecast as at July 1, 2017 was utilized:

Year
Western
Canadian
Select
(C$/bbl)
WTI at
Cushing
(US$/bbl)
Diluent
(Condensate)
(C$/bbl)
AECO Gas
(C$/mmbtu)
Exchange
Rate
(US$/C$)
H2 2017
47.83
49.00
65.63
2.83
0.750
2018
48.68
52.00
67.02
2.93
0.775
2019
53.17
57.00
70.89
3.05
0.800
2020
57.65
62.00
74.52
3.22
0.825
2021
60.54
66.00
77.32
3.39
0.850
2022
64.08
69.00
81.06
3.58
0.850
2023
67.60
72.00
83.60
3.76
0.850
2024
71.17
75.00
87.29
3.95
0.850
2025
74.61
78.00
90.98
4.03
0.850
2026
78.47
81.27
94.04
4.11
0.850
2027+
+2.0%/yr
+2.0%/yr
+2.0%/yr
+2.0%/yr
0.850

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”, “project” and similar expressions, may be used to identify forward-looking statements. Forward-looking statements in this press release may include, but are not limited to, statements regarding production from the Phase 2A expansion, completion of the Phase 2B expansion, the funding of the Phase 2B expansion and the anticipated production from the Phase 2B expansion. 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 or conditions, and expected economic life of the Orion Project, retaining a high quality, experienced management and operating 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, financial position, predictions of future actions or plans or strategies, 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, projected 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.

All reserve references in this press release are “Company share reserves”. Company share reserves are the Company’s total working interest reserves before the deduction of any royalties and including any royalty interests of the Company. It should not be assumed that the present worth of estimated future cash flow presented in the tables above represents the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions will be attained and variances could be material. The recovery and reserve estimates of Osum’s bitumen reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual bitumen reserves may be greater than or less than the estimates provided herein. All future net revenues are estimated using forecast prices, arising from the anticipated development and production of Osum’s reserves, net of the associated royalties, operating costs, development costs, and abandonment and reclamation costs and are stated prior to provision for interest and general and administrative expenses. Future net revenues have been presented on a before tax basis. Estimated values of future net revenue disclosed herein do not represent fair market value.

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 anywhere 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 reporting issuers in Canada or U.S. securities legislation including U.S. registered issuers under, among other things, applicable Canadian securities legislation or the U.S. Sarbanes-Oxley Act of 2002. 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:

Osum Oil Sands Corp.
Christi Clouter
cclouter@osumcorp.com

Osum saddened by death of Chairman, Rick George

Osum Oil Sands Corp. (Osum), its Board of Directors and staff are deeply saddened by the passing of Chairman, Richard L. (Rick) George, OC.

Mr. George had a long and distinguished career in Canada’s oil sands industry and joined the Osum Board of Directors as Chairman on October 29, 2012.

“Rick was a champion of Osum and its people,” said Steve Spence, CEO of Osum.  “His optimism for the future was balanced with a realistic view of the present – a perspective that has helped our company through the recent downturn.  He was a great friend and mentor, I will miss him greatly.”

Osum would like to extend its condolences to the George family during this difficult time.

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