Osum Achieves the First Reserve Booking in the Grosmont Carbonates and Records an 821 Million Barrel Increase in Best Estimat...
13 Marzo 2013 - 1:00PM
Marketwired Canada
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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
Proved plus
Probable
Proved plus plus
Proved Probable Possible
Reserves Reserves Reserves
Asset (1P) (MMbbl) (2P) (MMbbl) (3P) (MMbbl)
----------------------------------------------------------------------------
Cold Lake - 359 525
Saleski JV - 51 74
Saleski East - - -
Saleski West - - -
Liege
Other - - -
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- 410 599
Resources
Best Estimate
Contingent
Resources
Asset (MMbbl)
---------------------------------------------------------
Cold Lake 104
Saleski JV 1,079
Saleski East 906
Saleski West 1,470
Liege 570
Other 234
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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%)
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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
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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
----------------------------------------------------------------------------
Light and WSC Stream
Medium Exchange Quality at Inflation
Forecast Crude Oil Rate Hardisty Current Natural Gas Rate
----------------------------------------------------------------------------
WTI at Cushing Alberta Spot at
Oklahoma Plant Gate
(US$/bbl) US$/Cdn$ (Cdn$/bbl) (Cdn$/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%
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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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Inquiries:
Osum Oil Sands Corp.
Christi Millar
Communications Advisor
cmillar@osumcorp.com
www.osumcorp.com
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