Delivering GrowthOSUM OIL SANDS CORP. | FEBRUARY 2020 CORPORATE PRESENTATION
Osum Oil Sands Corp.
Disclaimer
Forward Looking Statements
This presentation contains statements that may constitute "forward-looking statements” within the meaning of applicable securities legislation. These
statements include, among others, statements regarding business strategy, beliefs, plans, goals, objectives, assumptions or statements about future
events or performance. By their nature, forward looking statements are subject to numerous risks and uncertainties, some of which are beyond the
Company's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations,
environmental risks, competition from other industry participants, lack of availability of qualified personnel or management, stock market volatility and
ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such
information, although considered reasonable at the time of preparation, may prove to be incorrect and, as such, undue reliance should not be placed on
forward-looking statements. Actual results, performance or achievement could differ materially from those expressed in, or implied by any forward looking
statements in this presentation, and accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will
transpire or occur, or if any of them do so, what benefits the Company will derive therefrom. The Company disclaims any intention or obligation to update
or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Reserves and Resources
Except where noted to be from another source, the reserve estimates herein were extracted from reports prepared by GLJ Petroleum Consultants Ltd.
(GLJ), an independent professional petroleum engineering firm, in accordance with definitions, standards and procedures contained in the Canadian Oil
and Gas Evaluation Handbook (COGEH), with the exception that data pursuant to the Curtailment Rules not available as at December 31, 2018 was
considered when estimating allowable bitumen production for 2019 in the evaluation of reserves and resources estimates at December 31, 2018.
Reserves are classified according to the degree of certainty associated with the estimates. Proved reserves are those reserves which can be estimated
with a high degree of certainty to be recoverable. It is 90 percent likely that actual remaining quantities will exceed estimated proved reserves. Probable
reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities
recovered will be greater or less than the sum of proved plus probable reserves. Possible reserves are those additional reserves that are less certain to
be recovered than probable reserves. Other criteria that must also be met for the categorization of reserves are provided in the COGEH. The preparation
of an evaluation requires the use of judgement in applying the standards and definitions contained in the COGEH. As the Company’s independent reserve
evaluator, GLJ applies those standards and definitions based on its experience and knowledge of industry practice. However, because the application of
the standards and definitions contained in the COGEH requires the use of judgement there is no assurance that governing securities regulator(s) will not
take a different view than GLJ as to some of the determinations in an evaluation.
Presentation of Financial Information
Unless otherwise stated, all figures presented are in Canadian Dollars.
2
Osum Oil Sands Corp.
A Growing Oil Business
3
QUALITY THERMAL ASSETS LOW DECLINE, LONG LIFE PRODUCTION
OVER 20,000 BPD IN Q4 2019
SOLID FINANCIAL POSITION
GOOD LIQUIDITY, SUBSTANTIAL FREE CASH
FLOW AND FALLING DEBT
FUTURE GROWTH POTENTIAL
APPROVAL FOR 60,000 BPD WITH 500+ MMBBL
2P RESERVES IN THE COLD LAKE REGION
Osum Oil Sands Corp. 4
Corporate Overview
● Private company with a growing, robust oil
business
● Led by an experienced management team
and board of directors
● Established production and cash flow base
in the Cold Lake region of Alberta
● Near term focus is on the Orion
Steam-Assisted Gravity Drainage (SAGD)
project – pursuing further facility
debottlenecking, cost reduction and staged
growth opportunities
● Additional organic growth opportunities
include the nearby Taiga SAGD project and
extensive holdings in the Grosmont
carbonate formation
● Development approach balances financial,
social and environmental priorities
Osum Oil Sands Corp.
The Orion Project
5
● SAGD project consisting of a central
processing facility and five well pads
● A series of phased brownfield expansions
have enabled growth with lower risk and
capital intensity
● Phase 2A expansion completed on time
and on budget in Q3 2017
● Phase 2BC expansion completed ahead
of schedule and under budget in Q3 2018
● Since acquiring Orion in 2014, Osum has
almost tripled production
Osum Oil Sands Corp.
Production Performance
6
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Q32019
Q42019
Ste
am
In
jecti
on
(T
/d)
Bit
um
en
Pro
du
cti
on
(b
bl/d
)
Bitumen Production Steam Injection
Phase 2BC
Start Up
Osum Oil Sands Corp.
Cold Lake Production Growth
• Current production of 20,000 BPD requires minimal
sustaining capital
• The next staged growth opportunities are expected to
increase production to 25,000 BPD
• The Taiga Project will follow Orion and has regulatory
approval for 35,000 BPD
7
ORION PHASE 2BCCOMPLETED
ORION PHASE 2ACOMPLETED
9,000 BPD
19,000 BPD
25,000 BPD
35,000 BPD
TOTAL ORION AND TAIGAPRODUCTION POTENTIAL
Osum Oil Sands Corp.
SAFETY LAND
WATER AIR
Safety and Environmental Performance
8
● Adopted Energy Safety Canada’s 10
Life Saving Rules as part of a broader
effort to align safety and training
practices across the industry
● Two recordable incidents in 2019 and
no lost time incidents
● No fresh water used for steam
generation
● Produced water recycle rate
approaching 90%
● In 2018, achieved an 11% reduction in
greenhouse gas intensity over 2017
● Overall, 26% reduction from original
facility baseline GHG intensity (2018
versus 2010)
● Phase 2ABC wells were drilled from
existing pads reducing surface
disturbance by 74% compared to the
original Phase 2 design
Osum Oil Sands Corp.
Solid Financial Position
9
● Given the curtailment of oil production by the Provincial
Government, focus is on strengthening the balance sheet
to be positioned for the next growth stage
● At December 31, 2019 vs. December 31, 2018:
− $114 million in unrestricted cash (+$61 million)
− Undrawn US$15 million revolving loan (no change)
− $223 million covenant light term loan (-$51 million)
● Rolling 12-month commodity hedging program executed
through 2020, targeting 50% of net production
● Supportive shareholder base
Osum Oil Sands Corp.
Approval for
60,000 BPD with Orion
and Taiga projects,
significant upside with
Saleski Carbonates
FUTURE
POTENTIAL
Phase 2ABC expansions
completed successfully
with additional staged
growth to follow
PATH TO
25,000 BPD
More than 20,000 BPD
at Orion*
*Q4 2019 Average
ESTABLISHED
BASE OF
PRODUCTION
SOLID
FINANCIAL
POSITION
Good liquidity, substantial
free cash flow and
falling debt
A Sustainable Future
10
Osum Oil Sands Corp.
Board of Directors
Name / Title Relevant Prior Experience
William A. Friley
Chairman
• President and Chief Executive Officer of Telluride Oil and Gas and President of Skyeland Oils
• Director of Obsidian Energy and Advanced Flow Technologies
Roy Ben-Dor • Principal, Warburg Pincus LLC
• Director of Black Swan Energy, Artis Exploration and Zenith Energy
Vincent Chahley • Director of Venturion Oil, Velvet Energy, and Aequitas Innovations
• Former Managing Director of Corporate Finance at FirstEnergy Capital
George Crookshank • Director of Advanced Flow Technologies
• Former Vice President of Finance and Chief Financial Officer of OPTI Canada Inc.
Jeffrey Kelly • Managing Director, Blackstone Capital Partners and Blackstone Energy Partners
• Formerly with Anadarko, Accenture and IHS
Jun Hyung (John) Lee • Principal, Blackstone Capital Partners and Blackstone Energy Partners
• Director of Huntley and Huntley, Utility One Source GP LLP and Gavilan Resources LLP
Francesco Mele • Partner, Azimuth Capital Management
• Director of Timber Rock Energy, Cequence Energy, and Altex Energy
Brian Reinsborough • Founder and CEO of Novara Energy LLC
• Founder, former President and CEO of Venari Resources
Steve Spence • President & CEO of Osum
11
Osum Oil Sands Corp.
Osum Oil Sands Corp. T: 403.283.3224 F: 403.283.3970
1900, 255 – 5th Avenue SW
Calgary, Alberta T2P 3 G6
Facebook.com/osumcorp
osumcorp.com
12
Top Related