The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from Marketwire

Sunshine Oilsands Ltd. Announces a C$390 Million 2013 Capital Budget Focused on Initiating Thermal Production

Wednesday, January 16, 2013

Sunshine Oilsands Ltd. Announces a C$390 Million 2013 Capital Budget Focused on Initiating Thermal Production17:36 EST Wednesday, January 16, 2013HONG KONG, CHINA--(Marketwire - Jan. 17, 2013) - Sunshine Oilsands Ltd. (TSX:SUO) (HKSE:2012) (a corporation incorporated under the Business Corporations Act of the Province of Alberta, Canada with limited liability)NOT FOR DISTRIBUTION OR DISSEMINATION IN OR INTO THE UNITED STATES.As at the date of this announcement, the Board consists of Mr. Michael John Hibberd and Mr. Songning Shen as executive directors, Mr. Hok Ming Tseung, Mr. Tingan Liu, Mr. Haotian Li and Mr. Gregory George Turnbull as non-executive directors and Mr. Raymond Shengti Fong, Mr. Wazir Chand Seth, Mr. Robert John Herdman and Mr. Gerald Franklin Stevenson as independent non-executive directors.* For identification purposes onlyThis announcement is made pursuant to Rule 17.06A of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules").Sunshine Oilsands Ltd. announced today that its Board of Directors has approved a total budget for 2013 of $430 million that includes a $390 million capital expenditure program directed at West Ells and advancing other growth projects.Mr. John Zahary, President and CEO, said "2013 promises to be a significant and exciting year in the development of Sunshine Oilsands. The Company is focused on progressing our key projects as we demonstrate long-term value creation to investors. By the end of 2013, we should be well-advanced with West Ells as well as moving forward on developments at Thickwood and Legend Lake."2013 Budget Strategic ObjectivesSunshine Oilsands' 2013 budget objectives are aligned with our long-term objective of risk- managed value-creation:Maximize value by focusing on high rate of return oilsands projects; Leverage off our substantial resource base and technical expertise to grow production in the near-term and further develop platforms for long-term growth; Confirm technical expertise through first-phase development of West Ells; Advance Thickwood and Legend Lake initial project phases through regulatory approval and initiate expansion phase applications to achieve significant volume growth; Execute a disciplined program to delineate and evaluate opportunities beyond West Ells, Thickwood and Legend Lake on clastic and carbonate reservoirs; and Maintain a strong financial position by working closely with capital providers as projects advance. 2013 Budget HighlightsThe 2013 budget has been set at $430 million with a primary focus on progressing the mechanical completion, commissioning, start up and early operation of West Ells, while advancing development of Thickwood and Legend to build towards a projected 300,000 bbl/d production capacity.The 2013 budget is allocated approximately:75% to West Ells, including 16 Steam Assisted Gravity Drainage (SAGD) injection/production well pairs; 16% to Thickwood and Legend and progressing development to a projected 300,000 bbl/d capacity; and 9% for other capital projects and general corporate purposes. The 2013 budget is expected to be funded through cash-on-hand and our $200 million committed, undrawn bank line. In addition, Sunshine is currently examining the potential for accessing the long term debt market for additional funding for ongoing growth opportunities. ABOUT SUNSHINE OILSANDS LTD .Sunshine Oilsands Ltd. is one of the largest non-partnered developers of oil sands leases by area in the Athabasca oil sands region, which is located in the province of Alberta, Canada. 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). Its principal operating regions in the Athabasca area are at West Ells, Thickwood, Legend Lake, Harper, Muskwa, Goffer, Pelican and Portage. Sunshine's properties are grouped into three main asset categories: clastics, carbonates and conventional heavy oil.The Company is constructing its first 10,000 barrel per day project at West Ells, with first production expected in late 2013, and expects near term regulatory approval of initial projects at Thickwood and Legend. Additional, substantially larger, projects are under development to contribute to Sunshine's estimated ultimate potential of approximately 1,000,000 barrels per day.FORWARD-LOOKING INFORMATION AND DISCLAIMERThis News Release may contain forward-looking information that 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, 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 the Company 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 information release 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 News Release, except as required under applicable securities legislation. The forward-looking statements speak only as of the date of this News Release 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 dated April 30, 2012 ("AIF"), "Risk Management" in our current MD&A 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 www.hkexnews.hk, on the SEDAR website at www.sedar.com or our website at www.sunshineoilsands.com.This document does not constitute and is not an offer to sell or a solicitation of an offer to buy Common Shares of the Company in the United States (including its territories and possessions, any State of the United States and the District of Columbia) or elsewhere.By Order of the Board of Sunshine Oilsands Ltd. Michael John Hibberd, Co-ChairmanandSongning Shen, Co-ChairmanFOR FURTHER INFORMATION PLEASE CONTACT: Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. Contact Information: Sunshine Oilsands Ltd.Mr. David SealockExecutive VP, Corporate Operations(1) 403 984 1446investorrelations@sunshineoilsands.comwww.sunshineoilsands.com