CALGARY,
May 14, 2014 /CNW/ - US Oil Sands
Inc. ("US Oil Sands" or the "Company") (TSXV: USO), a
company focused on oil sands exploration and production in
Utah announced today that its
Board of Directors has approved the Final Investment Decision to
proceed with construction of its PR Spring Project in Utah. The Company also provided an operational
update and filed its unaudited interim financial statements
("Interim Report") for the three month period ended
March 31, 2014 ("Q1 2014")
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 QUARTERLY HIGHLIGHTS
- The Board of Directors approved the Final Investment Decision
to proceed with construction of an enhanced Phase 1 Project at its
PR Spring location in Utah.
Phase 1 is designed to produce approximately 2,000 barrels per day
of bitumen with attractive capital costs, operating expense, and
environmental profile.
- With the approved enhancements, Phase 1 can now process a
broader range of oil sand ores while improving solvent and water
recovery. Design enhancements will substantially reduce solvent and
water losses;
- Phase 1, expected to achieve commercial production in the
second half of 2015, is estimated to have capital costs of
US$60 million;
- Kellogg Brown & Root LLC ("KBR") was selected to provide
project and construction management services for the PR Spring
Project. Working jointly with US Oil Sands, KBR will assist in
bringing both the extraction facilities and mine development into
commercial production;
- Initiated the procurement of long delivery equipment for PR
Spring. The Company has purchased a rotary slurry mixer, one of the
largest pieces of equipment in the project and will be placing
orders for other major equipment over the next four months as the
Company targets installation in early 2015; and
- The Company received approval of its U.S. patent application
for its bitumen extraction process, complementing the issuance of
the Canadian patent in 2012. The approval provides a key, strategic
advantage for the Company, as no commercial oil sands mining
process has yet been implemented that can operate with the overall
reduced environmental footprint that US Oil Sands' process
provides.
"Our first quarter has been an exceptional
period for our Company, as we transitioned the PR Spring Project
from the design stage to the execution and build stage" said
Cameron Todd, CEO of US Oil Sands.
"Included in this transition was our Board of Directors' approval
of major project enhancements that will enable us to cut our water
usage in half, increase our bio-solvent recovery by 50%, and
recover increased amounts of oil from a broader range of oil sands
ore. These improvements bolster our current credentials of
possessing the best environmental performance in the industry while
at the same time, leading in capital efficiency. This, in
combination with our recent receipt of our U.S. patent approval
will ensure US Oil Sands is uniquely positioned to expand its
leading technology to other developments, greatly enhancing value
for shareholders."
OPERATIONAL HIGHLIGHTS
During the first quarter of 2014 the Company
continued to work with its engineering consultants and equipment
suppliers to optimize engineering design on Phase 1 of the PR
Spring Project. Project construction, management and consulting
contracts have been awarded to KBR, FLSmidth USA Inc., and Norwest Corporation.
Additionally, the Company continued to work on future mine planning
activities with the assistance of its third party mine engineering
consultants.
Subsequent to the end of quarter, and in
compliance with National Instrument 51-101 - Standards of
Disclosure for Oil and Gas Activities, the Company released the
independent resource evaluation report issued by Calgary-based Sproule Unconventional Limited
("Sproule") dated April 2,
2014. The evaluation results detail the bitumen resource
assessment of the Company's PR Spring property in Utah as of February 28,
2014, and incorporate the results of the 184 wells drilled
and cored on the Company's PR Spring Project Area in 2011 and 2012.
Sproule's independent best estimate of discovered resource is 184.3
million barrels.
OUTLOOK
The Company's Board of Directors approved the
Final Investment Decision to proceed with construction of Phase 1
of its PR Spring Project in Utah.
The added design enhancements will allow the Company to obtain high
bitumen recovery from a broader range of oil sand ores
demonstrating the suitability of the process for expansion across
the Company's Utah leases and
potentially to Canada and other
deposits worldwide. These design improvements have the added
benefits of increasing solvent and water recovery, reducing overall
operating costs.
The enhanced project has been approved by the
Company's Board of Directors with estimated capital costs of
US$60 million.
For the remainder of 2014, the Company will
continue to focus on the final engineering design and procurement
of equipment, as it continues to progress site preparation and
construction of the PR Spring Project Area. The Company
anticipates that a significant portion of the fabrication of the
process extraction plant will be completed in 2014, with the
remaining fabrication and final field assembly to occur in 2015
followed by commercial start-up.
Management has also initiated preliminary mine
planning and permitting activities intended for future production
areas within the broader PR Spring Project Area. In addition, US
Oil Sands will continue its long term strategic goal of acquiring
the rights to additional resource lands by assessing relevant
growth opportunities existing outside its immediate area of
operation, including those in international jurisdictions such as
Canada and elsewhere.
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 2015.
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, mine planning, commencement
of commercial production, corporate development activities and
resource estimates. 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.
Discovered bitumen resources or discovered
bitumen initially-in-place is that quantity of bitumen that is
estimated, as of a given date, to be contained in known
accumulations on Company lands prior to production. Best estimate
is considered to be the best estimate of the quantity that will
actually be in-place. It is equally likely that the actual
remaining quantities in-place will be greater or less than the best
estimate. There is no certainty that it will be commercially viable
to produce any portion of the resources. Additional information
relating to resource estimates is contained in the Company's
Statement of Resources Data and Other Oil and Gas Information for
the year ended December 31, 2013
dated April 2, 2014 and available on
SEDAR at www.sedar.com.
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.