Sunshine Oilsands Ltd. Announces Results for First Quarter 2013

HONG KONG, May 14, 2013 /CNW/ -- Sunshine (HKEX: 2012; TSX: SUO) today announced its financial results for the first quarter of 2013. The Corporation's consolidated financial statements, notes to the consolidated financial statements and Management's Discussion and Analysis have been filed on SEDAR (, with the SEHK at ( and are available on the Corporation's website ( Sunshine's annual general meeting of shareholders was held on May 7, 2013 in Hong Kong (May 6, 2013 in Calgary). All figures are in Canadian dollars unless otherwise stated.


  • Sunshine continues to make significant progress in construction of the West Ells project. West Ells Phase 1 and Phase 2 are expected to produce 10,000 barrels per day.
  • As part of ongoing analysis of cost control for the project, the Corporation reviewed and revised its West Ells cost estimate by approximately $28 million to $496 million from $468 million. The Corporation now expects Phase 1 first steam to be in the fourth quarter of this year.
  • Milestones met at West Ells during the first three months of 2013 include: erection of the Phase 1 evaporator tower, completion of the drilling of the Phase 1 SAGD wellpairs completion and setting of approximately 80% of pilings for Phase 1. The Corporation has hired approximately 80% of the operations team.
  • In relation to other core areas, Sunshine continues to advance through the regulatory process for Thickwood with approval expected in the first half of 2013 for an initial 10,000 barrels per day project.
  • The Corporation is pleased that Mr. Mark Montemurro has joined the Sunshine team as Senior Vice President, Engineering and Geosciences.

Message to Shareholders

Sunshine Oilsands Ltd. (the "Corporation" or "Sunshine") is pleased to report on the results and activities for the first three months of 2013. 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 is the largest land holder of non-partnered leases within the oil sands with approximately 1.1 million acres of oil sands leases. The Corporation's independently prepared assessments of its reserves and resources, dated December 31, 2012, report total best estimate contingent resources at 5.1 billion barrels with an aggregate pre-tax PV10% value of $10.3 billion and proved plus probable reserves (2P) of 446 million barrels with an aggregate pre-tax PV10% value of $0.9 billion. "We believe in the significant opportunities these assets have to offer and the value these assets promise for our shareholders. There is significant potential to increase shareholder value," said President and CEO, John Zahary. As one of the largest independent oil sands development companies based on total acreage position and Recoverable Resources, Sunshine's resource base holds significant commercial development potential.

The Corporation is currently focused on constructing its West Ells Project, the first of three major project areas. West Ells Phase 1 has an initial production target rate of 5,000 barrels per day, which will be followed immediately by an approved Phase 2 expansion to a planned production capacity of 10,000 barrels per day in early 2014. In addition to West Ells activities, Sunshine is advancing regulatory approvals for two additional 10,000 barrels per day projects, one at Thickwood and one at Legend. Full commercial development from the Corporation's initial three project areas has the potential to reach a production capacity of 300,000 barrels per day of bitumen. Sunshine's growth is being led by an experienced team with strengths for operations, construction and capital markets. The Sunshine team is focused on gaining approvals and pursuing expansion applications to realize the full potential of these resources.

After a busy winter season, operational development for Phase 1 West Ells continues to make significant progress. The erection of the evaporator tower was completed in early January. The Phase 1 steam generator was delivered and the site office was installed. Drilling activities were busy in the first quarter of 2013 with the completion of eleven observation wells and six surface sections were drilled. After a detailed review of budgeted costs, Sunshine now projects the estimated capital cost on this 10,000 barrels per day project to be approximately $496 million, an increase of $28 million, approximately 6% compared to previous figures. The cost increase is primarily due to higher than expected construction costs, delays and scope changes. First steam was expected to be late in the third quarter of 2013 and Sunshine now anticipates first steam at site to occur in the fourth quarter of 2013. Drilling of the first eight well pairs for Phase 1 was completed after the end of the first quarter 2013. Completions on three of the eight well pairs is in progress while five well pairs were completed at March 31. For second quarter activities, Sunshine is moving ahead with the drilling of the second well pad in preparation for Phase 2 at West Ells.

For our management team, the recent cost increase at West Ells is disappointing. However, while the industry will continue to see challenges, the Corporation's focus is on execution and achieving delivery of these projects, first and foremost, at West Ells, and quickly followed by others.

Regulatory approval remains on track for the Sunshine's other two core SAGD projects. Thickwood approval is expected in mid-2013 and the Corporation is currently waiting for the final statement of concern to be removed. The 10,000 barrel per day project planned at Legend has made progress with its supplementary information requests and responses are expected to be submitted in the second quarter. Expansion applications are being prepared that will see ultimate capacity at West Ells, Thickwood and Legend for 300,000 barrels per day.

Summary of Financial Figures

For the first quarter of 2013, the Corporation had a net loss of $8.3 million compared to $32.3 million for the same period in 2012 and net loss per share of $0.00 and $0.02, respectively, for each period.

As at period end, the Corporation notes the following selected balance sheet figures:

March 31, 2013

December 31, 2012



Cash and cash equivalents



Exploration and evaluation assets



Property and equipment



Total liabilities



Shareholders' equity



Working capital surplus




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 three months ended March 31, 2013 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, on the SEDAR website at or our website at

About Sunshine Oilsands Ltd.

The Corporation is engaged in the evaluation and the development of oil properties for the future production of bitumen in the Athabasca oilsands region in Alberta, Canada. Sunshine trades on the SEHK under the symbol "2012" and on the TSX under the symbol "SUO."

For further enquiries, please contact:

Mr. John Zahary, President and CEO or Mr. David Sealock, Executive VP, Corporate Operations
Telephone: +1-403-984-1446
Email: and Website:

SOURCE: Sunshine Oilsands Ltd.

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