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."
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
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
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.
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