CALGARY, Oct. 18, 2013 /CNW/ - US Oil Sands Inc. ("US Oil Sands" or the "Company") (TSXV: USO) today announced the closing of the previously announced
$80 million private placement financing of US Oil Sands (the "Financing") with strategic investors Blue Pacific Investments Group Ltd. (through
Oil Associates, S.A.) ("Oil Associates"), Anchorage Capital Group, L.L.C. (through ACMO S.à.r.l.) ("ACMO") and Spitfire Ventures, LLC ("Spitfire") and certain accredited investors. The Financing was over-subscribed
and gross proceeds will be approximately $81 million following receipt
of an additional $1 million in subscription proceeds, which the Company
expects to receive imminently.
Pursuant to the terms of the Financing, US Oil Sands has appointed to
its Board of Directors (the "Board") Serafino Iacono and Ronald Pantin as nominees of Oil Associates,
Stephen Lehner as a nominee of ACMO, and Alfred Holcomb as a nominee of
Spitfire. Kevin Ulrich of ACMO and Rod Lewis of Spitfire who were
previously announced as incoming directors will act as observers to the
Board. Due to other commitments, Frank Giustra will not be appointed
to the Board. As observers, Kevin Ulrich and Rod Lewis will attend
Board meetings and lend their expertise and extensive experience to the
US Oil Sands team.
Verne Johnson, Cameron Todd and Ed Chwyl will retain their roles as
existing directors of the Company, with Verne Johnson continuing as
Chairman of the Board. Departing from the Board will be Douglas
Hunter, James Banister and Ken Stephenson.
"We are extremely pleased to have received shareholder and regulatory
approval for this strategic financing, as it fully funds the initial
2,000 bbl/day phase of our PR Spring Project and bolsters our corporate
development efforts to export our environmentally-responsible method of
oil sands extraction around the world," said Cameron Todd, CEO of US
Oil Sands. "Our new slate of prominent directors and Board observers is
unique for a company of our size and is an attribute that we plan to
leverage when growing our Company's operations into other oil sands
regions, such as those found in Canada and many other jurisdictions.
Moreover, we are fortunate to have available the considerable technical
expertise and operating experience of Messrs. Pantin and Lewis for the
Board which will assist us in executing our extensive expansion plans."
Mr. Todd finished by saying: "We again would like to acknowledge the
significant contribution of our three retiring directors in stewarding
US Oil Sands to its current level of success and thank them on behalf
of the entire Company."
The Company has received subscriptions for 540,036,331 common shares ("Common Shares") at a price of $0.15 per Common Share for gross proceeds of
approximately $81 million. A total of 532,968,331 Common Shares were
issued pursuant to an initial closing and it is anticipated that an
additional 7,068,000 Common Shares will be issued pursuant to a second
closing. Pursuant to the Financing, Oil Associates acquired ownership,
and currently holds a total, of 166,666,667 Common Shares and ACMO
acquired ownership, and currently holds a total, of 223,333,333 Common
Shares, representing approximately 20% and 26% of the issued and
outstanding Common Shares, respectively. Each of Oil Associates and
ACMO acquired the Common Shares for investment purposes and, although
they may from time to time increase or decrease their respective
ownership of Common Shares of the Company, neither has any present
intention to acquire additional Common Shares. The address of Oil
Associates is Edificio MMG, Piso 2, Calle 53 Este, Marbella, Panamá,
Republic of Panama and the address of ACMO is 26-28 Rue Edward
Steichen, L-2540, Luxembourg.
All Common Shares issued pursuant to the Financing are subject to a
statutory hold period of four months from the date of each closing. The
Financing was approved by a majority of the Company's shareholders
through written consents. Following the completion of the Financing, US
Oil Sands will have a total of 852,892,395 Common Shares outstanding on
a non-diluted basis.
US Oil Sands intends to use the proceeds from the Financing to finalize
the first phase of the commercial development of the PR Spring Project
and to accelerate future production phases. The Company's PR Spring
Property spans 32,005 acres of land in Utah's Uinta basin and,
according to a resource report prepared by Sproule Unconventional
Limited dated April 29, 2013 and effective as of February 28, 2013,
contains an estimated 184.3 MMbbl of discovered petroleum (bitumen)
initially-in-place. For additional information, please refer to the
Company's Form 51-101F1 - Statement of Resources Data and Other Oil and Gas Information available on SEDAR at www.sedar.com.
Together with funding the expenditures related to the closing of the
Financing and general corporate purposes, proceeds raised in excess of
those required to fund the PR Spring Project will allow the Company to
immediately initiate corporate development activities that may include
the acquisition of or participation in other oil sands assets located
outside the State of Utah. The Company intends to develop oil sand
resources using its patented bio-solvent technology that achieves
best-in-class environmental benchmarks and capital efficiencies.
Canaccord Genuity Corp., EAS Advisors, LLC through Merriman Capital,
Inc., and Fiore Management & Advisory Corp. acted as financial advisors
to US Oil Sands in connection with the Financing and were paid a total
of $2.8 million.
APPOINTEES & OBSERVERS TO THE BOARD OF DIRECTORS
Serafino Iacono is the Co-Chairman and an Executive Director of Pacific
Rubiales Energy Corp. (TSX: PRE; BVC: PREC; BOVESPA: PREB) ("Pacific Rubiales"). Mr. Iacono has been involved in the financing and development of
mining, oil and other resources projects in the United States, Latin
America and Europe for over 28 years and has raised more than four
billion dollars for numerous natural resource projects. He is a
founding member of Blue Pacific Investments Group Ltd., which owns
investments in infrastructure, mining, oil and gas and farming assets.
Currently, Mr. Iacono is also a Director and Executive Co-Chairman of
Gran Colombia Gold Corp. (TSX: GCM) and CGX Energy Inc. (TSXV: OYL) ("CGX Energy") as well as a Director of Pacific Coal Resources Ltd. (TSXV: PAK) ("Pacific Coal").
Ronald Pantin is the Chief Executive Officer and an Executive Director
of Pacific Rubiales and has overseen its significant growth to over
130,000 boe/d of net average daily production.
Pacific Rubiales, a Canadian company and producer of natural gas and
crude oil, owns 100% of Meta Petroleum Corp., which operates the
Rubiales, Piriri and Quifa heavy oil fields in the Llanos Basin, and
100% of Pacific Stratus Energy Colombia Corp., which operates the La
Creciente natural gas field in the northwestern area of Colombia.
Pacific Rubiales has also acquired 100% of PetroMagdalena Energy Corp.,
which owns light oil assets in Colombia, and 100% of C&C Energia Ltd.,
which owns light oil assets in the Llanos Basin. In addition, the
Company has a diversified portfolio of assets beyond Colombia, which
includes producing and exploration assets in Peru, Guatemala, Brazil,
Guyana and Papua New Guinea.
A veteran of the Venezuelan oil industry, Mr. Pantin has held numerous
high-profile positions with the Venezuelan state-owned energy company,
PDVSA, throughout his career including Vice President of Corpoven, Vice
President of PDVSA E&P, President of CVP, President of PDVSA
Exploration, President of PDVSA Services, and Executive Vice President
of PDVSA Oil & Gas. Mr. Pantin is also a director of Pacific Coal and
CGX Energy. Mr. Pantin holds Bachelors of Science degrees in Petroleum
Engineering and Management Science from Mississippi State University
with the highest distinction in 1975 and Masters of Science degrees in
Petroleum Engineering and Industrial Engineering from Stanford
University in 1977.
Stephen Lehner is a Sector Head at Anchorage Capital Group, L.L.C. ("Anchorage") where he is responsible for the firm's investments across energy,
transportation, and metals and mining. Prior to joining Anchorage he
was a Managing Director at Mount Kellett Capital Management, LP from
2009 to 2013 where he focused on investments in energy, refining,
chemicals, autos, and metals and mining. Mr. Lehner was a Managing
Director at Morgan Stanley where he worked from 2001 to 2009. He holds
a Masters of Business Administration with a concentration in finance
from the University of Maryland and is a Chartered Financial Analyst.
Alfred Holcomb is Board Certified in Tax Law and Estate Planning and
Probate Law by the Texas Board of Legal Specialization since 1983 and
was one of the first attorneys in Texas board certified in both of
these specialty areas. Mr. Holcomb obtained his B.A. in Finance in
1974 from University of Texas, a J.D. in 1977 from St. Mary's
University School of Law and an LL.M. in Taxation in 1978 from New York
University. Mr. Holcomb began his legal career in the San Antonio
based Federal Tax Law Firm of Schoenbaum, Curphy & Scanlan in 1978 and
became a partner in the Firm (1983-2004). In 2004, Mr. Holcomb began
work with Lewis Energy Group ("LEG"), a private oil and gas exploration company in San Antonio, Texas,
with operations in Texas centered in the Eagle Ford shale play. Mr.
Holcomb is currently serving as Vice President of Acquisitions and
Development with LEG.
Rod Lewis is the founder and CEO of LEG. Mr. Lewis has been actively
involved in the oil and gas industry since 1978. Since its inception
in the early 1980s, LEG has steadily grown and now controls over
400,000 acres of lands in the Eagle Ford shale trend of South Texas,
together with operations in Mexico and Colombia. In addition to LEG,
Mr. Lewis engages in other opportunities through entitles like Spitfire
Ventures, LLC. Mr. Lewis is a hands‐on executive and self‐made oil man.
Aside from oil and gas, Mr. Lewis' passion is his vintage warbird
collection, known as Lewis Air Legends. Son of an Air Force pilot, his
vintage warbird collection includes 24 aircraft, most of them the
classic WWII warbirds and is regarded as one of the top vintage warbird
collections in the world. He serves on the Board of Directors for the
Smithsonian Air and Space Museum.
Kevin Ulrich is the Chief Executive Officer and Portfolio Manager at
Anchorage which he co-founded in 2003 and is a Managing Member at
Anchorage Advisors Management L.L.C. Previously, he ran the proprietary
debt-trading operation at Goldman Sachs.
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
without the need for tailings ponds.
The foregoing information contains forward-looking information relating
to the future performance of the Company including information relating
to the use of proceeds of the Financing, closing of a second tranche of
the Financing, development and construction of the PR Spring Project,
commencement of commercial production, resource estimates, target
production levels, corporate development activities and international
opportunities. 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.
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,
2012 dated April 29, 2013 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.
To obtain a copy of the early warning reports filed by Oil Associates
and ACMO, please contact:
SOURCE: US Oil Sands Inc.
For further information:
US Oil Sands Inc.
Cameron Todd, CEO or Glen Snarr, President and CFO
Suite 1600, 521 - 3rd Avenue SW
Calgary, Alberta T2P 3T3
Tel: +1 403 233 9366
300 5th Ave. SW, 10th Floor
Calgary, Alberta T2P 3C4
Tel: +1 403 218 2833