NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE
CALGARY, Sept. 16, 2013 /CNW/ - US Oil Sands Inc. ("US Oil Sands" or the "Company") (TSXV: USO), a company focused on oil sands exploration and
production in the State of Utah, today announced the signing of a
letter of intent (the "Letter of Intent") with Blue Pacific Investments Group Ltd., Anchorage Capital Group,
L.L.C. and Spitfire Ventures, LLC (the "Strategic Investors"). Under the terms of the Letter of Intent, US Oil Sands will issue up
to $80 million of common shares of the Company at an issue price of
$0.15 per common share in a private placement financing (the "Offering"). The issue price represents a 49% premium to the 20 day volume
weighted average trading price of the Company's common shares.
Collectively, the Strategic Investors would hold approximately 63% of
the issued and outstanding common shares of the Company after giving
effect to the Offering. The Offering is expected to close on or about
October 15, 2013 and is subject to the parties entering into definitive
agreements and customary closing conditions, including due diligence as
well as shareholder and TSX Venture Exchange approval. The Strategic
Investors have an exclusivity period of forty five days within which to
enter into definitive agreements in respect of the Offering. Management
and directors of the Company unanimously support the transaction.
Upon closing, the Company's board of directors (the "Board") shall be reconstituted to include Serafino Iacono, Ronald Pantin, Rod
Lewis, Kevin Ulrich, and Frank Giustra. Verne Johnson, Cameron Todd
and Ed Chwyl will remain in their roles as directors of the Company,
with Verne Johnson remaining as Chairman of the Board. Departing from
the Board will be Douglas Hunter, James Banister and Ken Stephenson.
"This transaction is a transformational one for our Company, as it fully
funds Phase 1 of our PR Spring Project in Utah and bolsters our Board
with a group that brings world-class expertise, financial backing and
relationships," said Cameron Todd, CEO of US Oil Sands. "Partnering
with these strategic investors has greatly enhanced and fast-tracked
the future prospects of our Company and increased our potential to
export our proprietary, environmentally-responsible method of oil sands
extraction into other global jurisdictions, including Canada and Latin
Mr. Todd added: "On behalf of the entire Company, I wish to thank our
retiring directors for the exceptional leadership and financial support
they have provided since joining the Board over seven years ago. They
have played a key role in guiding the Company to its current level of
The Company intends to use proceeds from the Offering 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
Offering and general corporate purposes, proceeds raised in excess of
those required to fund the PR Spring Project 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.
After giving effect to the Offering, the Company will have 846,164,397
common shares issued and outstanding.
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 Offering.
ANALYST AND INVESTORS CONFERENCE CALL
US Oil Sands will be hosting a conference call to discuss the Offering
on Tuesday, September 17, 2013 at 10:30 a.m. Eastern Daylight Time. To
access the conference call, please dial 1-888-231-8191. If dialing
internationally (outside of North America) the conference call can be
accessed by calling 1-647-427-7450. Participants must request the US
Oil Sands Analyst & Investor Conference Call.
A replay of the conference call will be available through September 23,
2013. To access the replay, dial 1-855-859-2056 (North America) or
1-416-849-0833 (International) and enter reservation number 63838351
followed by the number sign.
Participants will include Cameron Todd, Chief Executive Officer, Glen
Snarr, President and Chief Financial Officer, and selected members of
BOARD OF DIRECTORS APPOINTEES
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) as
well as a Director of Pacific Coal Resources Ltd. (TSXV: PAK).
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
Resources Ltd. and CGX Energy Inc. 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.
Rod Lewis is the founder and CEO of Lewis Energy Group ("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
entities 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 Capital Group, L.L.C. 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.
Mr. Giustra is President and Chief Executive Officer of Fiore Financial
Corporation, a private firm managing a broad portfolio of private
equity investments. Mr. Giustra has an established track record of
building natural resource companies through access to capital and
creative deal-making. As President and later Chairman and Chief
Executive Officer of Yorkton Securities in the 1990s, he grew the firm
into a leading natural resource investment bank. As Chairman of
Endeavour Financial from 2001 to 2007, his vision and leadership led to
the successful launch of numerous resource companies, including Wheaton
River Minerals (acquired by Goldcorp), Silver Wheaton and Pacific
Rubiales Energy. Mr. Giustra's entrepreneurial successes also include
the founding of Lionsgate Entertainment, now one of the world's largest
independent film companies. Frank Giustra is a member of the board of
the International Crisis Group, Lionsgate Entertainment, Petromanas
Energy Inc., Streetohome Foundation and a Trustee of the Boston's
Museum of Fine Arts. He is also founder and President of The Radcliffe
Foundation. In 2007, Frank Giustra and Former President Bill Clinton
launched the Clinton Giustra Enterprise Partnership, alleviating
poverty in the developing world through education, training and supply
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 terms of the Offering and the timing of completion of the
Offering, changes to the board of directors of the Company, the use of
proceeds of the Offering, the development of the PR Spring Project,
resource estimates, 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, receiving regulatory and shareholder
approval for the Offering, 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. In particular, the completion and timing of the
Offering is based on a number of assumptions including definitive
agreements being entered into by the parties and all necessary
approvals being obtained from shareholders, the TSX Venture Exchange
and third parties. 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. There is no assurance that the Offering
will be completed in the manner contemplated herein or at all. 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.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy securities in the United States, nor
shall there be any sale of the securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful. The common shares
of the Company have not been, and will not be, registered under the
U.S. Securities Act of 1933, as amended and may not be offered or sold
in the United States absent registration or an applicable exemption
from the registration requirements.
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 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