Delivering Growth OSUM OIL SANDS CORP. OCTOBER 2018 CORPORATE PRESENTATION

Transcription

1 Delivering Growth OSUM OIL SANDS CORP. OCTOBER 2018 CORPORATE PRESENTATION

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 a report prepared by GLJ Petroleum Consultants Ltd. (GLJ), an independent professional petroleum engineering firm. GLJ s report is dated March 12, 2018 and has an effective date of December 31, GLJ s report was 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. Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. Contingent Resources are further classified in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterized by their economic status. Best Estimate Contingent ( BEC ) resource is considered to be the best estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate. 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 PRODUCTION RAMPING TO 18,000 BPD BY THE END OF Q GOOD LIQUIDITY, BUILDING CASH FLOWS + MANAGEABLE DEBT APPROVAL FOR 60,000 BPD AT COLD LAKE 500+ MMBBL 2P RESERVES QUALITY THERMAL ASSETS 11,000+ BPD (Q3 Average) STRONG BALANCE SHEET FUTURE GROWTH POTENTIAL 3

4 A Responsible Approach Prioritizing health and safety Maintaining financial discipline Integrating environmental and social considerations 4

5 Asset Overview The Orion Project is Osum s production and cash flow base. It provides near-term, lower-risk production volume growth at an attractive cost. The Taiga Project is behind Orion in the development queue. It is a shovel-ready greenfield development with full regulatory approval. The Saleski carbonate assets are an enormous resource, but have a higher cost of supply and technical risk. 5

6 The Orion Project Aerial view of Orion (2016) Steam-Assisted Gravity Drainage (SAGD) project consisting of a central processing facility and five well pads. Acquired in Q3 average production of more than 11,000 BPD with a projected 2018 exit rate of 14,000 BPD. 6

7 The Path to 20,000+ BPD Phased brownfield expansion enables growth with lower risk and capital intensity. Modified development plan results in more efficient operations with significantly less environmental impact than original design. Phase 2A expansion completed on time and on budget in mid Phase 2BC expansion completed ahead of schedule and under budget in Q Production ramping to 18,000 BPD by the end of Q Next expansion stage, Phase 2D, is expected to achieve in excess of 20,000 BPD. 9,000 BPD 18,000 BPD 20,000 BPD PHASE 2A COMPLETED PHASE 2BC COMPLETED PHASE 2D SANCTION PLANNED

8 Delivering Results 8

9 Cold Lake Growth Plan 60,000 55,000 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Taiga: Phase 3 Taiga: Phase 2 Taiga: Phase 1 Orion 2D Orion 2BC Orion 2A Cold Lake area production potential of 60,000 BPD. Staged development at Orion will be followed by development of the Taiga Project. The Taiga Project is a greenfield development with regulatory approval for 35,000 BPD that builds directly on Orion experience. Q3 Average Production: 11,000+ BPD. 9

10 Future Potential: Saleski Carbonates Osum holds a sizeable position in this enormous resource of exceptional reservoir quality. Estimated 18 Bbbl OBIP and 2.5 Bbbl unrisked BEC resources.* Pilot results have shown the potential for commercial development. Holding at a low cost as an option for future development. *As at December 31,

11 Solid Financial Position Phase 2D to be funded by cash on hand and cash flow. US$202MM covenant light term loan maturing in 2020, US$15MM undrawn revolver.* Rolling commodity hedging program targeting about 50% of production for the first 12 months and an average of 25% for the next 12 months. Supportive shareholder base. *As at September 30,

12 A Sustainable Future MORE THAN 11,000 BPD AT ORION* PATH TO OVER 20,000 BPD STRONG BALANCE SHEET FUTURE POTENTIAL Focused on building a base of production in Cold Lake, Alberta. *Q3 Average Production ramping to 18,000 BPD with Phase 2D to follow. Good liquidity, building cash flows and manageable debt. Approval for 60,000 BPD with Orion and Taiga projects, significant upside with Saleski Carbonates. 12

13 Board of Directors Name / Title William A. Friley Chairman Relevant Prior Experience Independent Businessman President and Chief Executive Officer of Telluride Oil and Gas and President of Skyeland Oils Director of Obsidian Energy and Advanced Flow Technologies Angelo Acconcia Senior Managing Director, Blackstone Capital Partners and Blackstone Energy Partners Director of Beacon Oil & Gas, Brix & Harvest, Gavilan Resources, Guidon Energy, Huntley & Huntley, Jetta Energy Permian, Primexx, LLOG, Royal Resources, and Vine Oil & Gas Roy Ben-Dor Principal, Warburg Pincus LLC Director of Black Swan Energy, Artis Exploration and Zenith Energy Vincent Chahley Independent Businessman Director of Venturion Oil, Velvet Energy, and Aequitas Innovations Former Managing Director of Corporate Finance at FirstEnergy Capital George Crookshank Independent Businessman Director of Advanced Flow Technologies Former Vice President of Finance and Chief Financial Officer of OPTI Canada Inc. (2002 to 2007) 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 & Advisor, Venari Resources LLC Former President of Nexen Petroleum U.S.A. Steve Spence President & CEO of Osum 13

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