HONG KONG, March 26, 2013 /CNW/ - Sunshine Oilsands Ltd. ("Sunshine") (HKEX: 2012; TSX: SUO) today announced its financial results for the fourth quarter and year
ended December 31, 2012. The Corporation's consolidated financial
statements, notes to the consolidated financial statements,
Management's Discussion and Analysis and Annual Information Form have
been filed on SEDAR (www.sedar.com), with the SEHK at (www.hkexnews.hk) and are available on the Corporation's website (www.sunshineoilsands.com). The Annual Information Form includes the Corporation's reserves and
resource data at an effective date of December 31, 2012 as evaluated by
GLJ Petroleum Consultants Ltd. and DeGolyer and MacNaughton Canada
Limited and prepared in accordance with National Instrument 51-101
Standards of Disclosure for Oil and Gas Activities. Sunshine's annual
general meeting of shareholders will be held on May 7, 2013 in Hong
Kong. All figures are in Canadian dollars unless otherwise stated.
Highlights
-
On March 1, 2012, Sunshine completed its IPO and listing on the Stock
Exchange of Hong Kong Limited (the "SEHK"), raising approximately $570
million under the listing symbol of "2012".
-
Through the IPO, the Corporation secured significant investment from
cornerstone investors such as Premium Investment Corporation, a
wholly-owned subsidiary of China Investment Corporation, EIG Management
Company and Sinopec Century Bright Capital Investment Limited, a
wholly-owned subsidiary of China Petrochemical Corporation, otherwise
known as the Sinopec Group.
-
Sunshine significantly increased its resource values and volumes in its
independently evaluated reserves and resource estimates as at December
31, 2012; total best estimate contingent resource assignment of over 5
billion barrels representing a 2 billion barrel (65%) increase from
November 30, 2011.
-
The Corporation signed a Memorandum of Understanding for strategic
cooperation with Sinopec International Petroleum Exploration and
Production Corporation.
-
In October, Sunshine secured a $200 million credit facility with a
syndicate of financial institutions. This credit facility was
oversubscribed and was expanded from its original size due to strong
interest.
-
The Corporation listed on the Toronto Stock Exchange ("TSX") on November
16, 2012 under the symbol of "SUO".
-
Operationally, the Corporation obtained approval for its first Steam
Assisted Gravity Drainage ("SAGD") 10,000 barrel per day project at
West Ells and commenced civil construction early in the year and
mechanical construction in the summer at the West Ells site.
-
At West Ells, the Corporation initiated and progressed substantial
development of the West Ells project, which is intended to start
steaming in the third quarter of 2013.
-
In relation to other core areas, Sunshine continues to advance through
the regulatory process for its Thickwood and Legend projects with
approvals expected in the first half of 2013 and later in 2013,
respectively, for an initial 10,000 barrels per day project in each
area.
Message to Shareholders
2012 was a year of tremendous success for Sunshine Oilsands Ltd.
("Sunshine" or the "Corporation"). We established our position in the
capital markets with the closing of a significant IPO and listing on
the Stock Exchange of Hong Kong and the Toronto Stock Exchange. We grew
our resource and reserves base with large additions and we grew our
operational presence materially. All of these accomplishments centered
around building shareholder value by moving ahead with the development
of our enormous clastic and carbonate resource base in the Athabasca
region of Alberta. We view these achievements to be just the beginning
for developing our long term production potential aimed at increasing
shareholder value.
Capital Market
We started off the year with the successful completion of our Hong Kong
initial public offering ("IPO") which saw us raise HK$4.5 billion
(approximately $570 million). We secured significant investments from
several prominent cornerstone investors. Our IPO was one of the largest
IPOs for the Stock Exchange of Hong Kong in 2012. A TSX listing in
Canada was obtained in the fourth quarter of the year. This TSX listing
facilitates the ability for North American shareholders to buy our
stock. In the fourth quarter, we continued to focus on securing funding
for our projects and negotiated a credit facility of $200 million with
a syndicate of several major financial institutions led by Alberta
Treasury Branches and Bank of China (Canada). The credit facility was
oversubscribed and was expanded from its original size due to strong
support from financial institutions that included Bank of America, HSBC
Bank, Morgan Stanley, Bank of Nova Scotia, Toronto-Dominion Bank, UBS
and Industrial and Commercial Bank of China. With the success of these
financings, we have secured a financial platform that supports our
business plan to begin developing our large oil sands asset base. This
initial development includes the completion of the construction of the
West Ells project, funding of front end costs for the Thickwood project
and regulatory development to expand capacity for these two main
projects and a third project at Legend. We believe the opportunity at
Sunshine is immense.
Facilitating joint venture discussions with parties who have expressed
interest for involvement in the development of our attractive assets
remains a top priority for Sunshine. Throughout fiscal 2012, we
continued discussions with interested parties, including Sinopec
International Petroleum Exploration and Production Corporation with
whom we have a Memorandum of Understanding for strategic cooperation.
In addition, in January 2013, we signed a Memorandum of Understanding
with China Oilfield Services Ltd. ("COSL"). We are working with a
syndicate of financial advisors to finalize and implement a debt
financing strategy.
Reserve Additions
Our resource base is one of the largest in the Athabasca region, where
Sunshine owns 100% of approximately 1.1 million acres of oil sands
leases. Our December 31, 2012 Reserves and Resources Reports confirmed
significant increases in Best Estimate Contingent Resource recognition
in both the clastics and carbonates categories compared to fiscal 2011.
Total Petroleum-in-Place ("PIIP"), which is the sum of discovered and
undiscovered PIIP components, increased to approximately 70 billion
barrels. Clastic Best Estimate Contingent Resource recognition
increased by 1.3 billion barrels to 3.7 billion barrels. Carbonate Best
Estimate Contingent Resource recognition increased by over 700 million
barrels to 1.4 billion barrels. Based on this, we believe our current
share price is trading at a significant discount to our PV10% resource
and reserves value. Our focus remains on the continuous investment in
and development of our massive resource base and, ultimately,
production from core project areas in order to translate these
opportunities into higher shareholder value.
As we look ahead to our long term plan, we believe opportunities
associated with our significant reserves and resource assets are
impressive. We have commercial development plans in the West Ells,
Thickwood and Legend areas targeting over 300,000 barrels per day of
production.
Operational Excellence
With funding in place for West Ells, we broke ground on October 10, 2012
and have made significant progress at the construction site. Several
key milestones were successfully achieved including the construction of
a 55 km all-season access road, key facility construction and the
completion of the drilling of the first pair of horizontal SAGD
producer wells. Major equipment has been delivered to site, including
heat recovery steam generators and free water knockouts. We kicked off
2013 with the standing of the evaporator tower - meeting schedule and
without incident.
We are pleased to report that we are progressing as planned for the West
Ells construction schedule. We continue to forecast total capital costs
of West Ells at approximately $468 million, excluding road construction
costs. With first steam expected in the third quarter of 2013, Phase 1
West Ells is designed to produce 5,000 barrels per day of bitumen
followed by an expansion for an additional 5,000 barrels per day
expected to be producing from Phase 2 in 2014. As we ramp up activities
to achieve near-term production and cash flow, this will provide the
basis to further support increasing recognition of value in Sunshine's
assets.
Although our near term focus remains on West Ells, we are working to
progress regulatory clearance for the Thickwood and Legend
applications. We expect to leverage off the first-phase development and
construction of our West Ells project and use this data to improve
results and cost efficiencies for future development phases and
projects. We will continue through the regulatory approval process in
2013 for the 10,000 barrel per day Thickwood and Legend commercial
projects. Expansion plans for significant bitumen production growth
will continue, we expect to file expansion applications for West Ells,
Thickwood and Legend as rapidly as possible.
Health, Safety and Community
Sunshine remains committed to working with local stakeholders as we
build a strong, sound and sustainable organization that is intended to
be meaningful in a global context. The Corporation consistently
maintains a disciplined approach to health, safety and environmental
issues and remains committed to operating in a socially responsible
manner with regularly conducted emergency response training, and safety
and environmental audits of our operating facilities. We are pleased to
report that we had no significant incidents in fiscal 2012.
What's Next
2012 was an exciting year for Sunshine with achievements that set the
groundwork for future milestones and accomplishments. 2013 is a pivotal
year for Sunshine as we continue to develop West Ells with first steam
in the third quarter. By the end of 2013, we should be at or near first
production at West Ells and we expect to be moving forward on
developments at Thickwood and Legend, with additional commercial
applications filed in support of our 300,000 barrel per day growth
plan. Sunshine's significant presence in the north-western part of the
Athabasca oil sands region represents an opportunity for investors
seeking value growth. As a management team, we continue to believe in
our execution capabilities and in the experience of our technical team
which strives for operational excellence. It is our dedication and
commitment to achieve results which will help to deliver on our
projects.
Independent Reserves and Resource Assessment, December 31, 2012
Sunshine's oil sands leases in the Athabasca oil sands region of
north-eastern Alberta hold an estimated 70 billion barrels of Total
Petroleum Initially in Place (PIIP, a sum of discovered and
undiscovered PIIP components). Sunshine's Reserves and Resources
evaluation completed by the independent evaluators, GLJ Petroleum
Consultants Ltd. ("GLJ Report") and DeGolyer and MacNaughton Canada
Limited ("D&M Report"), with an effective date of December 31, 2012,
confirmed a substantial increase in our recognized reserves and
resources from November 30, 2011. Main highlights of the new
independently prepared Reserves and Resources Reports include the
following:
-
80 million barrels of Proved Reserves with an aggregate pre-tax PV10%
value of $362 million;
-
446 million barrels of Proved Plus Probable Reserves with an aggregate
pre-tax PV10% value of $990 million; and
-
5.1 billion barrels of Best Estimate Contingent Resources with an
aggregate pre-tax PV10% value of $10.3 billion.
The following tables summarize the results of the latest reserves and
resources evaluation. In comparison to the November 30, 2011 reserves
and resources assessment, the latest evaluation shows a 78 million
barrel increase in proved reserves and 27 million barrel increase in
proved plus probable reserves. Clastic Best Estimate Contingent
resource recognition increased by 1.3 billion barrels to 3.7 billion
barrels. Carbonates Best Estimate Contingent resource recognition
increased by over 700 million barrels to 1.3 billion barrels. The
December 31, 2012 total best estimate contingent resource assignment of
over 5 billion barrels represents a 2 billion barrel (65%) increase
from November 30, 2011.
Reserves, effective December 31, 2012
|
Reserves
|
Proved
|
Proved Plus Probable
|
Proved Plus Probable Plus Possible
|
Gross[1] (MMbbls)
|
PV10% ($MM)
|
Gross[1] (MMbbls)
|
PV10% ($MM)
|
Gross[1] (MMbbls)
|
PV10% ($MM)
|
Total
|
80
|
362
|
446
|
990
|
605
|
1,665
|
|
|
Source: GLJ Report and D&M Report effective December 31, 2012. Values
are calculated before tax using the D&M price forecast effective
January 3, 2013.
|
|
|
1.
|
"Gross reserves" are the Company's working interest share before
deducting royalties and without including any royalty interests of the
Company. Net Reserves are the Company's working interest share after
deduction of royalty obligations, plus the Company's royalty interests
in reserves. The Corporation holds 100% working interest share in all
its properties.
|
Contingent Resources, effective December 31, 2012
|
Contingent Resources
|
Low Estimate
|
Best Estimate
|
High Estimate
|
Gross (MMbbls)
|
PV10% ($MM)
|
Gross (MMbbls)
|
PV10% ($MM)
|
Gross (MMbbls)
|
PV10% ($MM)
|
Total Clastics
|
1,748
|
3,102
|
3,712
|
8,069
|
6,139
|
16,307
|
Total Carbonates
|
463
|
839
|
1,345
|
2,225
|
5,250
|
10,060
|
Combined Total
|
2,211
|
3,941
|
5,057
|
10,294
|
11,389
|
26,367
|
|
|
|
Source: GLJ Report and D&M Report effective December 31, 2012. Values
are calculated before tax using the D&M price forecast effective
January 3, 2013.
|
Summary of Financial Figures
For the fourth quarter of 2012, the Corporation had a net loss of $9.2
million compared to $2.5 million for the same period in 2011 and net
loss per share of $0.00 for both periods. For the year ended December
31, 2012, the Corporation had a net loss of $61.7 million compared to
$68.8 million in 2011 and net loss per share for each respective year
of $0.02 and $0.05.
As at December 31, the Corporation notes the following selected balance
sheet figures:
|
2012
|
2011
|
|
($000s)
|
($000s)
|
Cash and cash equivalents
|
282,231
|
84,957
|
Exploration and evaluation assets
|
366,668
|
382,277
|
Property and equipment
|
327,971
|
719
|
Total liabilities
|
180,650
|
327,128
|
Shareholders' equity
|
871,076
|
148,587
|
About Sunshine Oilsands Ltd.
Sunshine Oilsands Ltd. (the "Corporation" or "Sunshine") is a Calgary
based public company, listed on the SEHK since March 1, 2012 and the
Toronto Stock Exchange since November 16, 2012. Sunshine is focused on
the development of its significant holdings of oil sands leases in the
Athabasca oil sands region. The Corporation owns 100% of approximately
1.1 million acres of oil sands leases, equivalent to approximately 7%
of the total oil sands leases granted in the Athabasca region. The
Corporation is currently focused on executing milestone undertakings in
the West Ells project area, where first steam is scheduled for the
third quarter of 2013. West Ells has an initial production target rate
of 5,000 barrels per day, which will be followed immediately by an
approved expansion to a planned production capacity of 10,000 barrels
per day in early 2014. In addition to West Ells activities, Sunshine is
progressing regulatory approvals for two additional 10,000 barrels per
day projects, one in Thickwood and one in Legend.
Sunshine's growth is being led by an experienced team with strong
capital markets, corporate governance and capital cost discipline.
FORWARD-LOOKING INFORMATION AND DISCLAIMER
This presentation (the "Presentation") contains forward-looking
information relating to, among other things: (a) the future financial
performance and objectives of Sunshine Oilsands Ltd. ("Sunshine" or the
"Corporation"); and (b) the plans and expectations of the Corporation.
Such forward-looking information is subject to various risks,
uncertainties and other factors. All statements other than statements
and information of historical fact are forward-looking statements. The
use of words such as "estimate", "forecast", "expect", "project",
"plan", "target", "vision", "goal", "outlook", "may", "will", "should",
"believe", "intend", "anticipate", "potential", and similar expressions
are intended to identify forward-looking statements. Forward-looking
statements are based on Sunshine's experience, current beliefs,
assumptions, information and perception of historical trends available
to Sunshine, and are subject to a variety of risks and uncertainties
including, but not limited to those associated with resource definition
and expected reserves and contingent and prospective resources
estimates, unanticipated costs and expenses, regulatory approval,
fluctuating oil and gas prices, expected future production, the ability
to access sufficient capital to finance future development and credit
risks, changes in Alberta's regulatory framework, including changes to
regulatory approval process and land-use designations, royalty, tax,
environmental, greenhouse gas, carbon and other laws or regulations and
the impact thereof and the costs associated with compliance. Although
Sunshine believes that the expectations represented by such
forward-looking statements are reasonable, there can be no assurance
that such expectations will prove to be correct. Readers are cautioned
that the assumptions and factors discussed in this Presentation are not
exhaustive and readers are not to place undue reliance on
forward-looking statements as our actual results may differ materially
from those expressed or implied. Sunshine disclaims any intention or
obligation to update or revise any forward-looking statements as a
result of new information, future events or otherwise, subsequent to
the date of this Presentation, except as required under applicable
securities legislation. The forward-looking statements speak only as of
the date of this announcement and are expressly qualified by these
cautionary statements. Readers are cautioned that the foregoing lists
are not exhaustive and are made as at the date hereof. For a full
discussion of our material risk factors, see "Risk Factors" in our most
recent Annual Information Form, "Risk Management" in our current MD&A
for the year ended December 31, 2011 and risk factors described in
other documents we file from time to time with securities regulatory
authorities, all of which are available on the Hong Kong Stock Exchange
at www.hkexnews.hk, on the SEDAR website at www.sedar.com or our website at www.sunshineoilsands.com.
For further enquiries, please contact:
Sunshine Oilsands Ltd.
|
Mr. John Zahary
President & CEO
|
Mr. David Sealock
Executive VP, Corporate Operations
|
|
Tel: +1-403-984-1446
Email: investorrelations@sunshineoilsands.com
Website: www.sunshineoilsands.com
|
SOURCE: Sunshine Oilsands Ltd.