PE-backed Osum Oil Sands completes $325 mln buy of Orion project

Osum Oil Sands Corp has closed its previously announced acquisition of the Orion Oil Sands Project from Shell Canada Ltd, a division of Royal Dutch Shell Plc, for $325 million. The project, located in Alberta’s Cold Lake oil sands region, will provide Osum with significant current production and cash flow, the company said. Founded in 2006, the Calgary-based Osum is backed by Canadian private equity firm KERN PartnersThe Blackstone Group, Warburg Pincus and other investors. KERN recently launched its fourth energy-focused partnership, KERN Energy Partners IV Fund, which is targeted to raise $750 million.


Osum Oil Sands Corp. Acquires Orion Oil Sands Project and Closes Senior Secured Credit Facilities

CALGARY, ALBERTA–(Marketwired – July 31, 2014) – Osum Oil Sands Corp. (“Osum” or the “Company”), a private in-situ oil sands company, today announced that its wholly-owned subsidiary, Osum Production Corp. (“OPC”), has completed the purchase of the Orion Oil Sands Project from Shell Canada (a Royal Dutch Shell Group entity) for Canadian $325 million.

Commenting on the success of the acquisition, Steve Spence, President and Chief Executive Officer, said: “The acquisition of the Orion project provides Osum with significant current production and cash flow. As well, we are pleased to welcome the high quality, experienced operating team members joining our organization today. We believe Osum has a unique opportunity to build a significant production platform from both Orion and our neighboring Taiga project in the Cold Lake region.”

The acquisition was funded from cash on hand and with the net proceeds of a new US$210 million Senior Secured Term Loan Facility to OPC (the “Term Loan Facility”). The Term Loan Facility has a maturity date of July 31, 2020 and an interest rate of LIBOR plus 5.50% with a 1.00% LIBOR floor. In addition, OPC has access to a US$15 million Senior Secured Revolving Loan Facility for general corporate purposes (the “Revolving Loan Facility”). Barclays Bank PLC and Goldman Sachs Lending Partners LLC acted as Joint Lead Arrangers and Joint Bookrunners for each of the Term Loan Facility and the Revolving Loan Facility.

Acquisition Highlights:
•The Orion Project is located in the Cold Lake oil sands region, in close proximity to numerous major oil sands developments. It is approximately 18 kilometers SW of Osum’s Taiga Project, which has received regulatory approval for the construction and operation of a 35,000 barrel per day facility.
•The Project has been producing commercially since 2007 using the well-established Steam Assisted Gravity Drainage (SAGD) thermal heavy oil recovery technology. ◦Second quarter production averaged approximately 6,800 barrels per day of bitumen from 22 well pairs. At forecast production rates, the Project is expected to have an economic life in excess of 25 years.

•Osum has 100% working interest and operatorship of the project.

CIBC World Markets Inc., Barclays Capital Canada Inc., and Goldman Sachs Canada Inc. acted as financial advisors to Osum in respect of the acquisition.

About Osum

Established in Alberta in 2005, Osum Oil Sands Corp. is a private oil sands producer focused on the responsible application of in-situ recovery technologies within Canada’s oil sands and carbonates. Additional information on the Company is available at

Cautionary Information and Forward Looking Statements

Certain statements contained in this press release may contain projections and “forward-looking statements” within the meaning of that phrase under Canadian and U.S. securities laws. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions may be used to identify forward-looking statements. Those statements reflect management’s current views with respect to future events or conditions, including expected cash flows, expected production levels, and expected economic life of the Orion Oil Sands Project, retaining a high quality, experienced operating team, financial position, predictions of future actions or plans or strategies.

Certain material factors and assumptions were applied in drawing conclusions and making forward-looking statements. By their nature, those statements reflect management’s current views, beliefs and assumptions and are subject to certain risks, uncertainties, known and unknown, and assumptions, including, without limitation, assumptions about expected cash flows, expected production levels, and expected economic life of the Orion Oil Sands Project, retaining a high quality, experienced management team, production delays, changing environmental and other regulations, the ability to attract and retain business partners, the ability to exploit hydrocarbon resources with available technology, the need to obtain and maintain proprietary rights over aspects of the technology, competition from other technologies, the ability to access the capital required for project development, research, technology development, operations and marketing, changes in energy prices and currency levels.

Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the projections or forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated, or expected. Osum does not intend and does not assume any obligation to update these forward-looking statements whether as a result of new information, plans, events or otherwise.

The Company’s securities are not traded on any stock exchange and thus, Osum is not subject to regulation by any Canadian stock exchange. Osum is not a reporting issuer in Canada and its securities are not registered under the United States Securities Act of 1933. As a result, the Company is not presently subject to the reporting, certification or other requirements imposed on Canadian Reporting Issuers or U.S. registered issuers under, among other things, applicable Canadian securities legislation or the U.S. Sarbanes-Oxley Act of 2002 (“SOX”).

This release is provided for information purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the common shares in any jurisdiction (including the United States) in which such offer, solicitation or sale would be unlawful.

Contact Information

Osum Oil Sands Corp.
Justin Robinson
Manager, Communications

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