Delivering Growth OSUM OIL SANDS CORP. JANUARY 2018 INVESTOR PRESENTATION

Transcription

1 Delivering Growth OSUM OIL SANDS CORP. JANUARY 2018 INVESTOR PRESENTATION 1

2 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, except as required by law. Reserves and Resources Except where noted to be from another source, the reserve and resource estimates herein were extracted from reports prepared by GLJ Petroleum Consultants Ltd. (GLJ), an independent professional petroleum engineering firm. GLJ s reports for the Company s Orion and Taiga projects are dated September 14, 2017 and September 22, 2017, respectively, and have an effective date of September 1, GLJ s report for the Company s Saleski carbonate projects is dated February 28, 2017 and has an effective date of December 31, GLJ s reports were prepared in accordance with resources and reserves definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (COGEH). 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

3 A Growing Oil Business EXECUTING PLAN TO DOUBLE PRODUCTION BY THE END OF 2019 $234MM NET WORKING CAPITAL* & $251MM COVENANT-LIGHT TERM LOAN* + 2 Canadian pension funds QUALITY ASSETS PRODUCING 9,000 STRONG BALANCE SHEET PRIVATELY OWNED *As at September 30,

4 A Responsible Strategy Building a base of production in Cold Lake, Alberta Maintaining financial discipline Integrating safety, environmental and social considerations into all decisions 4

5 The Cold Lake Region High quality reservoir continuous, thick, scalable. Better quality bitumen than Athabasca region. Highly-skilled, resident workforce. Extensive transportation and pipeline infrastructure. Closer to Edmonton and US markets. 5

6 Better Pricing CDN $50 Q YTD Realized Bitumen Price $40 $30 $40.37 $38.05 $36.41 $33.29 $32.32 $20 $27.77 $10 $0 Cold Lake Athabasca Source: Company reports. Prices are net of transportation & blending and, where disclosed, exclude financial and physical hedges. Q YTD average WTI US$49.44/bbl and average C$/US$ rate

7 The Orion Project Acquired in Base of current Cold Lake operations. Executing plan to double production by the end of Regulatory approval for production of 20,000. 7

8 Delivering Results Improved performance across all areas of the business. Demonstrated track record as a safe and responsible operator. 8

9 The Path to 20,000 Phased brownfield expansion enables growth with lower risk and lower capital intensity. Modified development plan results in more efficient operations with significantly less environmental impact than original design. Production ramps up during the 12 months following the wells coming online. Phased expansion results in the doubling of production by the end of 2019 and ~20% reduction in per barrel operating costs. 20,000 6,700 7,600 9,100 12,000 18,000 PHASE 1 At Acquisition Base Production PHASE 2A COMPLETED (Steam in Q2 2017) PHASE 2B (Steam in Q3 2018) PHASE 2C (Steam in Q4 2018) Approved Capacity 9

10 Funded to Execute $234MM net working capital, US $15MM undrawn revolver.* $251MM covenant light term loan maturing in 2020.* Active rolling commodity hedging program targeting about 50% of production for the first 12 months and 25% for the next 6 months. Prudently managing spending within the context of the current environment. Supportive shareholder base. *As at September 30,

11 The Taiga Project Comprehensive delineation and seismic assessments provide an extensive understanding of the geology. Two proven thermal development target zones. Same pricing advantages, reservoir and community as Orion. Regulatory approval for 35,000. Brings total approved capacity to 55, ,000 35,000 55,000 11

12 Saleski Carbonates: Future Potential Osum is one of the largest resource holders in the carbonates. Holdings of over 16 billion barrels of bitumen resource in place. 1 Five years of pilot operation has clearly demonstrated the potential for thermal recovery. Commercial demonstration options will be progressed when prudent. 1 As at December 31,

13 A Sustainable Future 9,000 AT ORION PATH TO 20,000 FUNDED TO EXECUTE FUTURE POTENTIAL Producing 9,000 at Orion thermal project with approval for 20,000. Executing plan to double current production by the end of $234MM in working capital and $251MM covenant light term loan.* Approval in hand for 55,000 with Orion and Taiga projects, significant upside with Saleski Carbonates. *As at September 30,

14 Osum Oil Sands Corp. Suite 1900, th Avenue SW, Calgary, Alberta T2P 3G6 T F info@osumcorp.com osumcorp.com 14