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CALGARY, Feb. 27, 2012 /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 2011 year-end results.
Acquired an additional 24,170 acres of undeveloped leases in Utah's
Uinta basin, making the Company the largest oil sands lease holder in
the United States;
Completed a 180 well coring program in the PR Spring, Cedar Camp and NW
Engaged a third party engineering firm to develop a detailed mine plan
of the PR Spring Mine Development and independently verify resource
Completed a private placement and issued 42,000,000 units for gross
proceeds of $12.6 million;
Completed public listing on the TSX Venture Stock Exchange trading under
the symbol USO.
"Last year we took the company to the next stage of its growth strategy
by successfully transitioning into a publicly traded company. That
transaction funded the leasing of an additional 24,170 acres of State
lands within the PR Spring Special Tar Sands Area and our 2011
operational program, which included drilling and coring 180 test wells,
expansion of the company's existing mine test pit, successful trials of
our proposed mining equipment, and conclusion of a successful water
exploration program " said Cameron Todd, CEO of US Oil Sands. "The
Company is now well positioned to begin construction of our first
commercial oil sands mine and processing plant from which we expect to
bring on first bitumen production in 2013."
2011 OPERATIONAL HIGHLIGHTS
In June 2011, the Company successfully closed the acquisition of an
additional 23,850 acres of undeveloped leases located approximately six
miles to the west of the PR Spring Project Area. An additional 320
acres were subsequently added to this acquisition. These acquisitions,
together with the prior lease holdings of 1,905 acres, bring total
exploration acreage to 26,075 acres. This newly acquired project area,
referred to as the Cedar Camp and NW Project Area, also taps into the
PR Spring Special Tar Sands Area as defined by the U.S. Geological
Survey. The Cedar Camp and NW Project Area is in the early stages of
Including 5,930 acres of development lands, US Oil Sands currently owns
a 100% working interest in its total 32,005 acres of land holdings. All
of the Company's leases are within the PR Spring Special Tar Sands Area
and are administered by the State of Utah School and Institutional
Trust Lands Administration. Royalties paid on production from these
lands are used to support the public school system in Utah.
The Company's leases are located within the Uinta Basin in Northeast
Utah, which aside from extensive oil sands deposits, is also well known
for its conventional oil and natural gas production. Consequently, oil
field services are abundant and available to support the Company's
coring program and subsequent bitumen development and production
operations. The following table summarizes the lease holdings of the
Oil Sands Acreage Under Lease
PR Spring Project Area
Cedar Camp and NW Project Area
2011 EXPLORATION AND DEVELOPMENT ACTIVITIES
The 5,930 acre PR Spring Project Area is the primary area on which the
Company has focused its exploration and development activities. The
Company completed its planned 145 well core holes ahead of schedule and
below budget and decided to drill an additional 35 wells to bring the
total program to 180 wells. To date, all of the wells have been
drilled, rigs released and the drill pads reclaimed.
Of the 147 wells that were drilled on the PR Spring Project Area, 55
were drilled to a 2.5 acre high-density spacing and 92 were drilled to
a 40 acre spacing. Results from the 55 well high-density portion of
the drilling program are being used for final design of the Company's
213 acre PR Spring Mine Development. Coring and assay information of
all 147 wells has also been provided to the Company's independent
reserves evaluator for completion of its annual resource assessment
required under National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities ("NI 51-101").
The Company drilled 33 exploratory holes in the 26,075 Cedar Camp and NW
Project Area. The log and assay results will be correlated to existing
geological information such that the Company will be able to more
clearly estimate the potential resource on this land.
In order to assess and finalize specifications for mining equipment to
be used to mine and condition the oil sand ore, the Company also
expanded its existing test pit and successfully tested the proposed
full scale mining equipment proposed for the project.
2011 FINANCIAL RESULTS AND ANALYSIS
Summary of selected financial results
Cash on hand
Shares outstanding at year end
The Company's financial statements and MD&A are available on SEDAR.
As at December 31, 2011, the Company had cash and cash equivalents of
$3,575,004 and net working capital of $3,428,501. The Company intends
to use its cash and cash equivalent balance to fulfill its liabilities
and commitments and fund its development project.
On April 18, 2011 pursuant to the terms of an amalgamation agreement
dated March 14, 2011, US Oil Sands Inc. (formerly International LMM
Ventures Corp.) acquired all of the issued and outstanding common
shares of Earth Energy Resources Inc. ("Earth Energy"), by the issuance
of 105,231,324 common shares of US Oil Sands Inc., such that Earth
Energy became a wholly-owned subsidiary of US Oil Sands Inc. (the
"Acquisition"). On May 9, 2011, Earth Energy and US Oil Sands Inc.
amalgamated and continue to operate as US Oil Sands.
In conjunction with the Acquisition, US Oil Sands Inc. completed a
private placement and issued 42,000,000 units at a price of $0.30 per
unit for gross proceeds of $12,600,000. Each unit consists of one
common share and one-half of one common share purchase warrant
exercisable at a price of $0.40 per share expiring April 18, 2013.
During 2012, US Oil Sands intends to finalize design and equipment
specifications, order all equipment, and initiate construction on its
PR Spring Project. Modular equipment skids are to be fabricated in
preparation for field-mobilization in 2013, with the majority of field
construction and equipment installation expected for midway through
that year. Project start-up is expected in late 2013 and full
production is anticipated for Q1 2014.
Detailed mine engineering and mine planning services for the PR Spring
Project are to be provided by Norwest Corporation, a leading mine
consulting firm with extensive experience in oil sands mining and
engineering. US Oil Sands has also contracted FLSmidth and Co., a
leading global mineral process engineering design and equipment
supplier, to provide detailed process engineering design and equipment
specifications for the Project.
When developing its asset base, US Oil Sands employs a unique approach
that utilizes modular production facilities that vastly reduce the time
associated with construction, production and mine reclamation. These
reduced time frames allow the company to rapidly and continuously
re-deploy its production facilities to other permitted production
sites. This novel approach to oil sands development requires only a
fraction of the capital required by the vast majority of current oil
sands projects. This allows for a significant increase in the net
present value of US Oil Sands by accelerating production.
Because of the speed at which the Company is able to develop its
resource base, it plans to continuously assess the resources inherent
to its development and exploration blocks, such that it has a ready
inventory of production sites on which to install its modular
In keeping with this, current coring and assay information has already
been provided to the Company's independent reserves evaluator for
completion of its annual resource assessment, as required under NI
RETENTION OF LEADING INVESTOR RELATIONS FIRM
US Oil Sands has retained The Equicom Group Inc. ("Equicom") to provide
strategic investor relations and communications services.
Equicom provides strategic communications services to approximately 100
public companies across a diverse range of industries. Under the terms
of the agreement, US Oil Sands will pay Equicom a monthly fee of $6,500
for select strategic communication services. The initial contract term
is 12 months and commences immediately.
Neither Equicom nor any of its principals have an ownership interest,
directly or indirectly, in US Oil Sands or its securities, nor has the
Company granted Equicom or its principals any rights to acquire any
such interests. Equicom is a wholly-owned subsidiary of TMX Group Inc.
ABOUT US OIL SANDS INC.
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
thereby eliminating the need for tailings ponds. The Company is in the
pre-production stage and anticipates bitumen production and sales to
commence in 2013.
The foregoing information may contain forward-looking information
relating to the future performance of the Company. 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.
For further information:
US Oil Sands Inc.
Cameron Todd, CEO
Glen Snarr, President & CFO
Suite 950, 633 - 6th Avenue SW
Canada T2P 2Y5
Tel: +1 403 233 9366
300 5th Ave. SW, 10th Floor
Calgary, Alberta T2P 3C4
Tel: +1 403 218 2833