Osum Announces Extension of Debt Maturity and Surpasses Production Target Ahead of Schedule

Calgary, Alberta (July 3, 2019) – Osum Oil Sands Corp. (“Osum” or the “Company”), a private oil sands company, announced today that it has completed an amendment with lenders to extend the maturity date of  90.6%, or approximately US$172 million, of its existing US$190 million senior secured first lien term loan by two years to July 31, 2022. The interest rate on the extended portion of the loan has been increased and will vary between LIBOR plus 7.5% and 9.5% per annum depending on the Company’s debt to cash flow ratio. The remaining 9.4% of the loan, or approximately US$18 million, will continue to bear interest at LIBOR plus 5.5% per annum and mature as scheduled on July 31, 2020. Barclays acted as sole lead arranger and sole bookrunner for the transaction.

Commenting on the debt extension, Steve Spence, President and CEO of Osum said, “Osum’s ability to extend the term loan on reasonable terms in a challenging market well in advance of the maturity date reflects a strong degree of support from our lenders. Our level of debt is manageable at current commodity prices. However, until there is significant progress on resolving the current egress issues, we will be devoting much of our excess cash flow to reducing debt to ensure that we have the financial capacity to invest in our business when conditions improve.”

Operationally, the Company is pleased to report that Q2 2019 production from its Orion Thermal Project in the Cold Lake oil sands region of Alberta averaged over 19,000 barrels per day, more than doubling production following the completion of the Phase 2BC expansion in Q3 2018. This surpasses the facility’s production target of 18,000 barrels per day and was reached well ahead of the previously stated timeline of September 2019.

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, expected future interest rates, the expected use of excess cash flow and the Company’s ability to manage debt. 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, expected economic life of the Orion Thermal 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, and 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:

Christi Clouter
cclouter@osumcorp.com

Osum Announces Successful Completion of Expansions at Orion

CALGARY, ALBERTA (October 1, 2018) – Osum Oil Sands Corp., a private oil sands company, today provided an update on expansion activities at its Orion Thermal Project, located in the Cold Lake oil sands region of Alberta.

Over the last 12 months, Osum has sanctioned and successfully completed both its Phase 2B and Phase 2C expansions. These scopes, executed concurrently, were completed ahead of schedule and under budget. The expanded plant facility is fully operational with current performance in line with expectations. Average production for the third quarter exceeded 11,000 barrels per day, a more than 30 per cent increase over the second quarter. The increase in average production reflects lower than expected declines from existing wells along with earlier than forecast contribution from six of 18 new well pairs. The projected exit rate for 2018 has been raised by 27 per cent to 14,000 barrels per day.

Commenting on the expansion, Steve Spence, President and CEO of Osum said, “I would like to thank our staff and contractors for their efforts to bring this expansion to successful completion. I am proud of the efficient and effective track record we have set in delivering Phases 2A through 2C on time and within budget. We anticipate hitting 18,000 barrels per day by the end of Q3 2019, three months earlier than our previous forecast. We are well positioned to maintain our growth trajectory, potentially pursuing additional expansion opportunities in 2019.”

Osum is planning a Phase 2D expansion that will bring average daily production at Orion to over 20,000 barrels per day. The Company also has regulatory approval for its 35,000 barrel per day Taiga Project, a greenfield development located less than twenty kilometres 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, expected declines, 2018 projected exit rate, expected production in Q3 2019 and the anticipated Orion Phase 2D expansion and resulting production increase. 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, expected economic life of the Orion Thermal 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, and 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

Six Lakeland Students Receive Osum Leader of Tomorrow Award

COLD LAKE, ALBERTA (June 5, 2018) – Osum Oil Sands Corp. (Osum) announced today recipients of the 2018 Osum Leader of Tomorrow Award.   The $1000 bursary recognizes six Grade 12 students in the Lakeland who show leadership in bringing positive change to their school or community.

The 2018 Recipients of the Osum Leader of Tomorrow Award are:

  • Abigail Dinn, Cold Lake High School
  • Aydan Desjarlais, Assumption Jr/Sr High
  • Hannah Bouvier, Bonnyville Centralized High School
  • Hannah Krafchek, Cold Lake High School
  • Jarred Dargis, Ecole Notre Dame High School
  • Stephanie Tellier, Ecole Notre Dame High School

“The Osum Leader of Tomorrow Award is an important part of our commitment to help youth develop into extraordinary people” said Dennis Ozaruk, Orion Operations Manager.  “The Award provides an opportunity for us, and the community nominator, to acknowledge students for their acts of integrity and leadership, while also providing support toward their educational goals.”

The Osum Leader of Tomorrow Award was established in 2012.  Each spring members of the community are asked to nominate graduating students they have observed going the extra mile for their community or their peers.  Since its inception, 50 students have now received the Award.

Click here to learn more about the 2018 recipients of the Osum Leader of Tomorrow Award.

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