Osum Oil Sands Corp. a private in-situ oil sands company, has entered into a purchase agreement for the Orion Oil Sands Project from Shell Canada for the price of C$325 Million, subject to customary purchase price adjustments and certain closing conditions, The transaction is anticipated to close on or around July 31, 2014.
As quoted in the press release, highlights from the acquisition are:
- 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.
- First quarter production averaged approximately 6,700 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 will have 100% working interest and operatorship of the project.
Osum CEO, Steve Spence, said:
The Orion Project is a first class operation that will provide Osum with significant current production and cash flow. Our immediate focus is on ensuring a safe and smooth transition of operations. In the longer term we believe that by linking Orion together with our nearby Taiga Project, Osum has a unique opportunity to build a significant production platform in the Cold Lake region.