CALGARY,
March 18, 2013 /CNW/ - US Oil Sands
Inc. ("US Oil Sands" or the "Company") (TSXV: USO), a
company focused on oil sands exploration and production in
Utah, today announced that it has
filed its audited consolidated financial statements ("Financial
Report") for the twelve month period ended December 31, 2012 along with the management
discussion and analysis ("MD&A") of the financial
results of US Oil Sands for such period.
A copy of the aforementioned documents may be
found for viewing on the System for Electronic Document Analysis
and Retrieval website at www.sedar.com as well as US Oil Sands'
website at www.usoilsandsinc.com.
SELECTED OPERATIONAL & FINANCIAL
HIGHLIGHTS
- Closed a private placement financing for gross proceeds of
$11,020,452;
- Completed a field program on the 5,930 acre PR Spring Project
Area consisting of:
-
- Drilling 37 core wells directed at infill delineation of
bitumen resources in new mine project areas;
- Drilling and completion of two water wells and successfully
evaluating the targeted aquifer confirming sufficient quantities of
water for phase 1 production requirements;
- Further testing of the continuous surface mining equipment to
confirm operating parameters and design specifications;
and
- Third party geological evaluation of core stored from the 2011
program, as part of the development of a detailed geological and
depositional model for the Uinta Basin.
- Obtained approval of a patent application from the Canadian
Intellectual Property Office; and
- Received favourable rulings from both the Utah Department of
Environmental Quality and the Utah Division of Oil, Gas and Mining
upholding previously issued permits for its PR Spring Project
Area.
"During 2012 we significantly advanced our PR
Spring Project by making great strides with regard to our technical
planning and operational execution," said Cameron Todd, CEO of US Oil Sands. "Further
success was also achieved with the approval of our patent
application in Canada, as well as
in the regulatory area where our best-in-class environmental
practices were challenged, yet overwhelmingly supported by
favorable regulatory and legal rulings. We are continuing to pursue
a joint venture financing to provide funding for the first phase of
the PR Spring Project. We anticipate a successful conclusion
of the process later this year in time for construction to be
initiated in 2013 and production operations to commence in
2014."
OPERATIONAL HIGHLIGHTS
During 2012, the Company completed a field
program on its 5,930 acre PR Spring Project Area. The program
consisted of a 37-hole coring program, a water supply drilling and
testing program, and surface mining equipment specification
testing.
The coring program, which involved drilling to
an average depth of approximately 200 feet, was directed at infill
delineation of known or expected bitumen deposits and all
intersected bitumen pay. The results of these core holes will be
integrated into the Company's resource modelling software and used
for permitting the next phases of mine expansion beyond the
existing permitted mine area.
During the year, the Company engaged a respected
Calgary-based third-party
geological consulting firm to examine core from the Company's
coring programs to develop a detailed geological and depositional
model for the Uinta Basin which is important for use in planning
exploration activities and acquisition opportunities.
In addition, the results from the coring program
will be assessed by the Company's independent resource evaluators
for inclusion in the independent resource evaluation report due to
be filed on or before April 29, 2013
in compliance with National Instrument 51-101 - Standards for
Disclosure of Oil and Gas Activities.
REGULATORY RULINGS
On October 24,
2012, the Utah Department of Environmental Quality's Water
Quality Board voted to support the Company's permit-by-rule as
previously issued by their Division of Water Quality on
March 4, 2008. The hearing, which was
initiated in April 2011 through a
Request for Agency Action filed by a Utah-based environmental organization against
the Utah Division of Water Quality, claimed that the Division
improperly issued a permit-by-rule to the Company. The final
decision upholding the issuance of the permit was published
November 1, 2012 by the chairman of
the Water Quality Board.
On January 14,
2013, the Board of Directors of the Utah Division of Oil,
Gas and Mining ("DOGM") voted to support DOGM's previous approval
of the Company's Notice of Intention to Commence Large Mining
Operations at its PR Spring Project Area. This hearing, which was
initiated in September 2010 through a
Request for Agency Action filed by a Utah-based environmental organization against
DOGM, claimed that DOGM improperly issued the Company's Notice of
Intention to Commence Large Mining Operations. The final decision
was published February 27, 2013 by
the chairman of the board of DOGM.
As of the date hereof, the decision by the Water
Quality Board was appealed to the Utah Supreme Court by the
Utah-based environmental
organization. Appeals cannot introduce new evidence and are
heard only on the basis of technicalities of law. There are
no other challenges or appeals against the Company or the
regulatory agencies on any regulatory permits held by the Company
in respect of its planned operations for the PR Spring Project
Area.
INTELLECTUAL PROPERTY
On September 6,
2012, the Company received notice of the approval of the
patent application relating to its bitumen extraction process from
the Canadian Intellectual Property Office.
The Company completed the international filing
of its patent application through World Intellectual Property
Organization (WIPO) in October 2007
and continues to prosecute its US application, which remains
pending with the United States Patent and Trademark Office.
SUMMARY OF SELECTED 2012 FINANCIAL
RESULTS
The following financial data were selected from
the Company's consolidated financial statements which have been
prepared using the accounting policies under IFRS as issued by the
International Accounting Standards Board.
December 31 |
2012 |
2011 |
2010 |
Total assets |
20,957,317 |
14,074,958 |
3,673,863 |
Net loss |
(4,396,126) |
(3,993,101) |
(1,580,752) |
Total comprehensive loss |
(4,608,059) |
(3,857,128) |
(1,580,752) |
Cash used in operations |
(3,548,596) |
(2,445,410) |
(1,131,249) |
Loss per share - basic and diluted |
(0.02) |
(0.02) |
(0.02) |
As at December 31,
2012, the Company had cash and cash equivalents of
$5,327,732, net working capital of
$5,059,894 and no commitments for
capital expenditures. The Company intends to use its cash and cash
equivalent balance to fulfill its liabilities and commitments and
fund its development project. The Company has no bank debt or
banking credit facilities in place.
SUBSEQUENT EVENTS
The Company also announced that pursuant to the Company's stock
option plan, a total of 4,825,000 stock options were granted to
Directors, Officers and Employees of the Corporation at an exercise
price of $0.115 per share expiring on
March 18, 2018, subject to regulatory
approval.
OUTLOOK
For the remainder of 2013, US Oil Sands will
continue to focus on site preparation and construction of the PR
Spring Project Area, including final project engineering and
procurement of necessary equipment and supplies. In keeping with
these activities, Management anticipates that the majority of the
fabrication of the process extraction plant will be completed in
2013, with final field assembly and commercial start-up expected to
occur in 2014. The timing of these plans is to a large degree
dependent on when the Company completes a joint venture financing
that provides the capital necessary to undertake major
expenditures. US Oil Sands has enlisted the services of external
corporate finance advisors to assist in the process of marketing
and closing a joint venture financing.
As a part of its longer term strategic
objectives, US Oil Sands intends to pursue additional opportunities
both through exploration and acquisition of additional resource
lands in order to achieve the Company's strategic target of 50,000
bpd capacity by 2020. Management intends to accomplish this by
furthering regulatory application efforts on available properties,
so as to ensure a ready inventory of future mineable assets for the
Company.
ABOUT US OIL SANDS LTD.
US Oil Sands is engaged in the exploration and
development of oil sands properties and, through its wholly owned
United States subsidiary US Oil
Sands (Utah) Inc., has a 100%
interest in bitumen leases covering 32,005 acres of land in
Utah's Uinta basin. The Company
plans to develop its oil sands properties using its proprietary
extraction process which uses a bio-solvent to extract bitumen from
oil sands without the need for tailings ponds. The Company is in
the pre-production stage, anticipating the commencement of bitumen
production and sales in 2014.
The foregoing information contains
forward-looking information relating to the future performance of
the Company including information relating to the development and
construction of the PR Spring Project, commencement of commercial
production, resource estimates, target production levels and joint
venture financing arrangements. Forward looking information is
subject to a number of known and unknown risks, uncertainties and
other factors that may cause actual results to differ materially
from those anticipated in our forward looking statements. Such
risks and other factors include, among others, the actual results
of exploration activities, changes in world commodity markets or
equity markets, the risks of the petroleum industry including,
without limitation, those associated with the environment, delays
in obtaining governmental approvals, permits or financing or in the
completion of development or construction activities, title
disputes, change in government and changes to regulations affecting
the oil and gas industry, and other risks and uncertainties
detailed from time to time in the Company's filings with the
Canadian securities administrators (available at www.SEDAR.com).
Forward-looking statements are made based on various assumptions
and on management's beliefs, estimates and opinions on the date the
statements are made. Should one or more of these risks and
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described
in the forward-looking information contained herein. The Company
undertakes no obligation to update forward-looking statements if
these assumptions, beliefs, estimates and opinions or other
circumstances should change, except as required by applicable
law.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE US Oil Sands Inc.