|By PR Newswire||
|November 13, 2012 09:00 PM EST||
HONG KONG, Nov. 13, 2012 /PRNewswire/ -- Sunshine Oilsands Ltd. (the "Corporation" or "Sunshine", HK: 2012) today is pleased to announce its unaudited interim financial results for the three and nine month periods ended September 30, 2012. All figures are in Canadian dollars unless otherwise stated. Please see the attached announcement for further information.
Operational Update - Third Quarter of 2012:
Sunshine is a major holder and developer of oil sands resources, with approximately 70 billion barrels of total Petroleum Initially In Place ("PIIP"). The Corporation is focused on development of these assets with the first phase of a 10,000 barrels per day project, currently under construction at West Ells, scheduled for start up in mid 2013. Sunshine is also progressing regulatory approvals for two additional 10,000 barrels per day (total 20,000 barrels per day) projects at Thickwood and Legend Lake. Approvals are expected in the first half of 2013. With over 4.96 billion barrels of contingent resources and 445 million barrels of proved plus probable ("2P") reserves, the Corporation has significant commercial development potential. In addition, Sunshine has recently updated its commercial development plans in the West Ells, Thickwood and Legend Lake areas and is now targeting over 300,000 barrels per day of production from these areas, representing a 50% increase in previously announced commercial production targets.
West Ells Development
As of September 30, 2012, $110.9 million has been incurred for West Ells equipment, engineering, construction, civil works, drilling, completions and other project related expenditures. The Project is currently on schedule and on budget for completion. The Corporation estimates total capital investment for its West Ells 100,000 barrels project to approximate $3.5 billion. Sunshine remains focused on West Ells Phase One construction, which has an initial production rate of 5,000 barrels per day, followed by an already approved expansion to the planned production capacity of 10,000 barrels per day. First steam is expected to commence in mid-2013 and first production is expected in the fourth quarter of 2013.
The access road to West Ells is now complete and ready for heavy hauls. This will ensure that project milestones are met and that the project will be completed on schedule for first steam in mid 2013. Subsequent to quarter end, on October 10, 2012, pilings for the Central Process Facility ("CPF") commenced. As well, some of the major equipment, including a gas turbine generator and an evaporator was in transit to marshalling yards. Other major equipment still to be received includes steam generators, free water knockout, pumps, and heat exchangers. Civil construction of the CPF is approximately 40% finished, with facilities general engineering approximately 75% complete.
In addition to the road and CPF, the first of Well Pad 2 SAGD well pairs spudded on October 29, 2012. The camp is fully functional, and the borrow pits are complete and in use. For capital commitments, 100% of the long lead equipment has been ordered and approximately 80% of the secondary long lead equipment has been procured. Phase 1 downhole completion and production equipment have been ordered and drilling rigs arrived on August 20, 2012. Drilling rigs for the observation wells were mobilized and were spudded on October 26, 2012. No major delays have been encountered.
Thickwood and Legend Lake
In addition to the progress made on the 10,000 barrel per day project applications approvals for both the Thickwood and Legend Lake projects, the Corporation has progressed the Front End Engineering and Design ("FEED") for Thickwood. This work is approximately 10% complete. In addition, detailed baseline environmental data collection is ongoing and is expected to be completed by the end of 2012. This work provides information required for project applications larger than 12,000 barrels per day in anticipation of future commercial development plans.
Cold flow assets
The Corporation continues with the exploration and development of its Muskwa heavy oil assets. As at September 30, 2012, five pads with 39 development wells have produced a cumulative total of approximately 305,000 barrels. Muskwa cumulative production for the first 9 months of 2012 is barrels approximately 168,000, representing an average of 625 barrels per day. The Corporation continued production optimization activities in the Muskwa field by implementing new technologies and techniques for enhancing production, sand clean out and other types of wellbore stimulations. The Corporation also commenced construction of its planned pad extension to accommodate future drilling. The Corporation received regulatory approval to install electric heaters on two horizontal wellbores at its Muskwa operations. Field work commenced late in the summer and is scheduled to be completed in mid-fourth quarter of 2012. Muskwa remains in the resource definition stage for the Corporation's financial reporting purposes. As a result, the Corporation capitalizes all costs incurred to date including operating costs net of revenues.
The Board of Directors of the Corporation is pleased to announce the results of the Corporation and its wholly-owned subsidiaries for the three and nine month periods ended September 30, 2012 together with comparative figures for the corresponding period in 2011 as follows:
President's Message to Shareholders
We are pleased to present to you the unaudited interim financial results including the interim financial statements and management's discussion and analysis of Sunshine Oilsands Ltd. ("Sunshine") for the three and nine months ended September 30, 2012. This report presents a discussion of key highlights for the first nine months of 2012, a performance update, summary comments on developments and our 2013 outlook.
We would like to extend our sincere gratitude to you, our shareholders, for your continued support and interest in Sunshine. At Sunshine, we believe we have the assets and experience to continue to pursue significant value-added opportunities. We continue to focus on executing milestone undertakings in the West Ells project area, where first steam is scheduled for mid-2013. West Ells has an initial production target rate of 5,000 barrels per day, which will be followed by an approved expansion to a planned production capacity of 10,000 barrels per day. In addition to West Ells activities, Sunshine is progressing regulatory approvals for two additional 10,000 barrels per day projects, one in Thickwood and one in Legend Lake.
At the start of the third quarter, we released the results of our updated independently prepared Reserves and Resource Reports (the "Reserves and Resource Reports"). These reports, dated May 31, 2012, were prepared by GLJ Petroleum Consultants Ltd. and DeGolyer and MacNaughton Canada Limited and the results confirmed a substantial increase in our recognized reserves and resources base.
Main highlights of the independently prepared Reserves and Resource Reports include the following:
- 69 billion barrels of Total Petroleum Initially In Place ("PIIP"),
- 5 billion barrels of Best Estimate Contingent Resources with an aggregate pre-tax PV10% value of $6.9 billion (increase of 1.9 billion barrels representing 63% growth);
- 80 million barrels of proved ("1P") reserves with an aggregate pre-tax PV10% value of $312 million (increase of 78 million barrels);
- 445 million barrels of proved plus probable ("2P") reserves with an aggregate pre-tax PV10% value of $918 million (increase of 26 million barrels); and
- 603 million barrels of proved plus probable plus possible ("3P") reserves with an aggregate pre-tax PV10% of $1.6 billion (increase of 42 million barrels).
The Reserves and Resources Reports confirmed significant increases in PIIP and Best Estimate Contingent Resource recognition in both the clastics and carbonates categories. PIIP recognition increased by approximately 24 billion barrels to approximately 69 billion barrels. Clastics Best Estimate Contingent Resource recognition increased by 1.2 billion barrels to 3.6 billion barrels primarily due to the Corporation's drilling program in its core areas of Harper, Opportunity and Pelican Lake. Carbonates Best Estimate Contingent Resource recognition increased in the core areas of Goffer, Muskwa and Portage, adding over 700 million barrels. Based on this, our current share price is trading at a significant discount to our PV10% resource and reserves value. At a 10% discount rate for 2P and Best Estimate Contingent Resource before taxes, this equates to approximately HK$21.40 per share.
During the third quarter, development of our first phase Steam Assisted Gravity Drainage ("SAGD") project at West Ells progressed well. Activities throughout the summer and increasing through the fall period continued to advance construction and development at the West Ells site. The access road was completed as were the borrow pits. Our camp is now fully functional. Pilings for the Central Process Facility commenced on October 10, 2012. In addition, following quarter end, some of the major equipment was in transit to marshalling yards. Drilling rigs for the observation wells were mobilized and our first SAGD well pair was spudded subsequent to quarter end on October 29, 2012. No major delays have been encountered in our planned West Ells construction schedule.
Thickwood and Legend Lake continue to advance through the regulatory process with approvals currently expected by mid-2013 for an initial10,000 barrels per day of production in each area.
The successful completion of the initial public offering ("IPO") on March 1, 2012 and the Listing on the Stock Exchange of Hong Kong Limited have been significant achievements. Sunshine raised gross proceeds of HK$4.5 billion (approximately $570 million) and secured significant investments from cornerstone investors. With this financing, we secured a financial platform that validates our business intent to develop our large oil sands asset base.
Subsequent to the end of the third quarter, the Corporation successfully secured a $200 million credit facility with a syndicate of financial institutions, led by Alberta Treasury Branches and Bank of China (Canada). This oversubscribed facility was expanded from its original size due to strong support from financial institutions that included Bank of America N.A., Canada Branch, HSBC Bank Canada, Morgan Stanley Senior Funding, Inc., Scotiabank, Toronto-Dominion Bank, UBS AG Canada Branch and Industrial and Commercial Bank of China (Canada). This credit facility positions the Corporation well to complete construction of the West Ells project, to fund front end costs of the Thickwood project and to advance program and regulatory development to expand capacity for the West Ells, Thickwood and Legend Lake projects.
During September, the Corporation commenced a share buyback program that ran from September 16 to October 12, 2012. During that time, the Corporation repurchased approximately 61 million shares. Sunshine continues with an active investor relations effort throughout Asia, North America and globally. We continue to emphasize the attractiveness of the Corporation's value in communications with existing shareholders and with potential new shareholders. In order to increase the incentive for North American shareholders to buy our stock, we applied and obtained conditional approval to list our Class "A" common voting shares on the Toronto Stock Exchange.
Joint Venture Initiatives
Joint venture discussions continued during the third quarter. We are pleased to confirm that we are continuing to work with Sinopec International Petroleum Exploration and Production Corporation, with whom we have a Memorandum of Understanding for strategic cooperation, as well as other parties who have expressed interest for involvement in our development of our attractive assets. We look forward to reporting details of matured joint venture discussions in a timely manner.
The Corporation consistently maintains a disciplined approach in health, safety and environmental issues and remains committed to operating in a socially responsible manner with regularly conducted emergency response training, and safety and environmental audits of our operating facilities. We had no significant incidents to report during the third quarter of 2012.
Sunshine also remains committed to working with local stakeholders as we build an organization that is intended to be meaningful in a global context.
Sunshine has recently updated its commercial development plans in the West Ells, Thickwood and Legend Lake areas and is now targeting over 300,000 barrels per day of production from these areas, representing a 50% increase in previously announced commercial production targets.
With approximately 70 billion barrels of PIIP, Sunshine has a significant presence in the north-western part of the Athabasca oil sands region that represents an opportunity for investors seeking value growth. Our outlook for the remainder of 2012 and looking ahead to 2013 is one of significant promise. With over 4.96 billion barrels of contingent resources and 445 million barrels of 2P reserves, Sunshine has significant commercial development potential with considerable upside. We are confident that our internal development and evaluation efforts complemented with broadening the market's understanding of Sunshine's assets, will result in share price appreciation over time. We continue to work towards first steam at West Ells by mid-2013. Production from West Ells will provide immediate cash flows to re-invest in our other planned capital projects, Thickwood and Legend Lake. This should, combined with anticipated expansion applications and approvals for our projects, increase probable and proved reserves, which are typically ascribed to higher values in active markets.
Sunshine has achieved several milestones during the first nine months of 2012. These would not have been possible without the committed efforts of our Board of Directors and our dedicated, hard-working employees. We will continue to seek out and attract talented people to sustain a high level of excellence in execution of our corporate development plans. We believe in the immense potential of our asset base and understand that to increase shareholder value, we need to remain disciplined and focused on project milestones and within our financial means. We look forward to a busy winter season and are excited by the potential of our planned development projects.
President and Chief Executive Officer
November 14, 2012
About Sunshine Oilsands Ltd.
Sunshine Oilsands Ltd. is one of the largest non-partnered holders of oil sands leases by area in the Athabasca oil sands region, which is located in the province of Alberta, Canada. Since the Company's incorporation on 22 February 2007, Sunshine has secured over 464,897 hectares (1,148,785 acres) of oil sands leases (equal to approximately 7% of all granted leases in this area).
The Company's principal operations are the exploration, development and production of its diverse portfolio of oil sands leases. Its principal operating regions in the Athabasca area are at West Ells, Thickwood, Legend Lake, Harper, Muskwa, Goffer, Pelican and Portage. Sunshine's oil sands leases are grouped into three main asset categories: clastics, carbonates and conventional heavy oil.
For further enquiries, please contact:
Sunshine Oilsands Ltd.
Mr. John Zahary
Mr. David Sealock
President & CEO
Executive VP, Corporate Operations
Email: [email protected]
SOURCE Sunshine Oilsands Ltd.
Predictive analytics tools monitor, report, and troubleshoot in order to make proactive decisions about the health, performance, and utilization of storage. Most enterprises combine cloud and on-premise storage, resulting in blended environments of physical, virtual, cloud, and other platforms, which justifies more sophisticated storage analytics. In his session at 18th Cloud Expo, Peter McCallum, Vice President of Datacenter Solutions at FalconStor, discussed using predictive analytics to mon...
Dec. 4, 2016 07:00 PM EST Reads: 4,890
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
Dec. 4, 2016 06:30 PM EST Reads: 2,159
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Onalytica. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
Dec. 4, 2016 06:30 PM EST Reads: 2,023
"We are an all-flash array storage provider but our focus has been on VM-aware storage specifically for virtualized applications," stated Dhiraj Sehgal of Tintri in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 4, 2016 06:30 PM EST Reads: 536
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
Dec. 4, 2016 06:00 PM EST Reads: 1,530
In IT, we sometimes coin terms for things before we know exactly what they are and how they’ll be used. The resulting terms may capture a common set of aspirations and goals – as “cloud” did broadly for on-demand, self-service, and flexible computing. But such a term can also lump together diverse and even competing practices, technologies, and priorities to the point where important distinctions are glossed over and lost.
Dec. 4, 2016 05:45 PM EST Reads: 1,506
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of Soli...
Dec. 4, 2016 04:45 PM EST Reads: 1,638
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 4, 2016 04:15 PM EST Reads: 598
"IoT is going to be a huge industry with a lot of value for end users, for industries, for consumers, for manufacturers. How can we use cloud to effectively manage IoT applications," stated Ian Khan, Innovation & Marketing Manager at Solgeniakhela, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 4, 2016 04:15 PM EST Reads: 4,151
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
Dec. 4, 2016 03:00 PM EST Reads: 3,249
Join Impiger for their featured webinar: ‘Cloud Computing: A Roadmap to Modern Software Delivery’ on November 10, 2016, at 12:00 pm CST. Very few companies have not experienced some impact to their IT delivery due to the evolution of cloud computing. This webinar is not about deciding whether you should entertain moving some or all of your IT to the cloud, but rather, a detailed look under the hood to help IT professionals understand how cloud adoption has evolved and what trends will impact th...
Dec. 4, 2016 03:00 PM EST Reads: 2,518
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, discussed the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
Dec. 4, 2016 02:15 PM EST Reads: 1,994
We are always online. We access our data, our finances, work, and various services on the Internet. But we live in a congested world of information in which the roads were built two decades ago. The quest for better, faster Internet routing has been around for a decade, but nobody solved this problem. We’ve seen band-aid approaches like CDNs that attack a niche's slice of static content part of the Internet, but that’s it. It does not address the dynamic services-based Internet of today. It does...
Dec. 4, 2016 02:00 PM EST Reads: 925
Internet of @ThingsExpo, taking place June 6-8, 2017 at the Javits Center in New York City, New York, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @ThingsExpo New York Call for Papers is now open.
Dec. 4, 2016 02:00 PM EST Reads: 1,901
What happens when the different parts of a vehicle become smarter than the vehicle itself? As we move toward the era of smart everything, hundreds of entities in a vehicle that communicate with each other, the vehicle and external systems create a need for identity orchestration so that all entities work as a conglomerate. Much like an orchestra without a conductor, without the ability to secure, control, and connect the link between a vehicle’s head unit, devices, and systems and to manage the ...
Dec. 4, 2016 02:00 PM EST Reads: 582