HONG KONG and CALGARY, Canada, March
26, 2015 /CNW/ -- Sunshine Oilsands Ltd. (the "Corporation"
or "Sunshine") (HKEX: 2012; TSX: SUO) today announced its
financial results for the fourth quarter and the year ended
December 31, 2014. The Corporation's
consolidated financial statements, notes to the consolidated
financial statements, Management's Discussion and Analysis and
Annual Information Form have been filed on SEDAR (www.sedar.com)
and with The Stock Exchange of Hong Kong Limited (the "Hong Kong
Stock Exchange") (www.hkexnews.hk) and are available on the
Corporation's website (www.sunshineoilsands.com). The Annual
Information Form includes the Corporation's reserves and resource
data as at an effective date of December 31,
2014 as evaluated by GLJ Petroleum Consultants Ltd. and
DeGolyer and MacNaughton Canada Limited and was prepared in
accordance with National Instrument 51-101 Standards of Disclosure
for Oil and Gas Activities. Sunshine's annual general meeting of
shareholders will be held on June 24,
2015 in Hong Kong. All
figures are in Canadian dollars unless otherwise stated.
Message to Shareholders
In 2014, Sunshine successfully focused on two key
initiatives:
- securing capital to support re-commencement of construction of
the first phase of the West Ells steam assisted gravity drainage
("SAGD") project; and
- detailed preparations for managing the construction, schedule
and costs at West Ells.
The restart of construction at West Ells was achieved in
October 2014 after key capital
raising initiatives were completed. These initiatives secured
$144.0 million of equity proceeds
between December 2013 and
June 2014 and achieved closing of a
US$200 million senior secured notes
offering in August 2014.
For the year ended December 31,
2014, the Corporation achieved progress in the following
areas:
- Expanded the Project Management Team, the most important new
hire being a new Senior Project Manager for Facilities Engineering
with extensive SAGD operations and engineering procurement and
construction experience;
- Substantially completed investigational analysis of work done
and formalized plans to complete Phase 1 construction of the West
Ells SAGD project;
- Conducted quality assurance and quality control
inspections;
- Completed preparations for construction recommencement;
- Reopened our 250 man construction camp at West Ells to support
full operational capability;
- Engaged major contractors (mechanical, electrical and civil) to
support West Ells project execution;
- Resumed full construction of Phase 1 of West Ells in
October 2014;
- Received 52 of 65 major modules at the West Ells site during
2014; and
- Achieved planned progress in construction activities.
As at the date of this announcement, construction of the West
Ells facilities is proceeding in line with budgets and is
approximately 92% complete, with only one large module remaining to
be shipped.
Sunshine's Capital Raising Activities
- From December 2013 to
February 2014 Sunshine closed private
placement offerings of Units totaling 288,042,193 Units at a price
of HK$1.70 per Unit (approximately
$0.24/Unit) for total gross proceeds
of HK$489.7 million (approximately
$68.7 million). Each Unit consisted
of one Class "A" common share and one-third of one Class "A" common
share purchase warrant. This resulted in an issuance of 288,042,193
Class "A" common shares and 211,230,941 share purchase
warrants.
- In June 2014, Sunshine closed a
private placement offering of Class "A" common shares, for a total
of 640,000,000 Class "A" common shares at a price of HK$0.85 per share (approximately $0.12 per share) for total gross proceeds of
HK$544.0 million or approximately
$75.4 million.
- On July 17, 2014, the Corporation
entered into a petroleum, natural gas and general conveyance
agreement for the sale of certain non-core oilsands assets which
related to, among other things, lands and petroleum and natural gas
rights to a third party for total consideration of $20.0 million. The disposal was conducted between
the parties on an arm's length basis. The sale was completed on
July 21, 2014.
- On August 8, 2014, the
Corporation completed an offering of US$200
million senior secured notes (the "Notes") at an offering
price of US$938.01 per US$1,000 principal amount. The Notes bear
interest at a rate of 10% per annum and have a final maturity date
of August 1, 2017. The Notes are
senior secured obligations over the Corporation's assets.
Summary of Financial Figures
For the fourth quarter of 2014, the Corporation had a net loss
of $12.3 million compared to
$7.5 million for the same period in
2013, representing a net loss per share of $0.00 for both periods. For the year ended
December 31, 2014, the Corporation
had a net loss of $26.8 million
compared to $32.8 million for the
year ended December 31, 2013,
representing a net loss per share for each respective year of
$0.01 and $0.01.
As at December 31, the
Corporation notes the following selected balance sheet
figures:
|
2014 ($000s)
|
|
2013
($000s)
|
|
Cash and cash
equivalents
|
136,097
|
|
15,854
|
|
Current restricted cash
and cash equivalents
|
23,467
|
|
-
|
|
Non-current restricted
cash and cash equivalents
|
11,601
|
|
-
|
|
Exploration and
evaluation assets
|
379,403
|
|
376,912
|
|
Property and
equipment
|
701,736
|
|
634,672
|
|
Total
liabilities
|
288,044
|
|
148,415
|
|
Shareholders'
equity
|
972,016
|
|
880,973
|
|
Reserves and Resources
On March 10, 2015, the Corporation
announced the results of its reserves and resources evaluations,
effective as at December 31, 2014.
For a full discussion of the Corporation's reserves and resources
data and other oil and gas information, see the "Statement of
Reserves Data and Other Oil and Gas information" in the
Corporation's Annual Information Form for the year ended
December 31, 2014, a copy of which is
available on the Hong Kong Stock Exchange's website at
www.hkexnews.hk, on the SEDAR website at www.sedar.com and on the
Corporation's website at www.sunshineoilsands.com.
2015 Outlook
Sunshine remains committed to completing and producing the West
Ells project and continues to look for opportunities for joint
ventures to reduce capital commitments and to accelerate activities
aimed at increasing production. In addition, the Corporation's
ongoing plan for 2015 is to continue to look for opportunities to
secure additional financing to expand construction, operations and
development activities in the West Ells project area and in other
areas.
The schedule for West Ells startup has been modified as of
March 26, 2015. The Board of
Directors has endorsed a management recommendation to extend the
commissioning and start up period for the West Ells project. Under
the revised schedule, extended commissioning activities are
anticipated to result in full first steam commencing in late
June 2015, with first oil in
September 2015. The Board of
Directors believes that Sunshine's operational priority is to
ensure a smooth start up of the Phase 1 West Ells facilities and
achievement of nameplate capacity of 5,000 bbls/d, since this
initial project phase is central to validating the commercial
potential of the Wabiskaw formation in the West Ells, Thickwood and
Legend project areas. Key considerations noted in the schedule
revision include the following:
1) Electrical installation,
instrumentation and programming were being fast tracked to achieve
first steam for Phase 1 of the West Ells project. This fast
tracking introduced a risk that costly delays could result from
sub-optimal electrical and control systems performance. It is
management's opinion that this risk can be avoided if a thorough
extended installation and testing protocol is followed.
2) Management has noted that
productivity and cost efficiency on the West Ells site can be
better managed through commissioning on an extended schedule.
Current daily on-site contract personnel is averaging between 180
and 200, plus 40 operations personnel on shift rotations. Peak
on-site personnel exceeded 425 plus operations personnel, during
January and February 2015.
3) There is currently a concern that
there is potential for delay in receipt of licences and municipal
permits required for start up in mid-April
2015. This is not viewed as a risk with an extended
commissioning and start up schedule.
4) There is a potential to take
advantage of lower contract and labour costs by spreading West Ells
completion and commissioning activities over a longer time period
in the softening labour and contracting environment.
5) If additional financing is secured to
fund Phase 2 expansion at West Ells, significant cost efficiencies
can be secured through contracting at lower costs and through
avoidance of demobilization and remobilization costs through an
extended schedule.
As at the date of this announcement, construction of the West
Ells facilities is proceeding in line with budgets and is
approximately 92% complete, with only one large module remaining to
be shipped.
Acknowledgements
We would like to thank our Board of Directors, our staff and our
stakeholders for their continuing support for advancing our
corporate initiatives during a challenging commodity price
cycle. We intend to ensure that our West Ells initiatives are
completed to ensure a smooth start up of the Phase 1 West Ells
facilities and achievement of nameplate capacity.
Michael
J. Hibberd
|
|
Dr. Qi Jiang
|
Executive Vice
Chairman
|
|
President & COO
|
About Sunshine Oilsands Ltd.
The Corporation is a Calgary
based public corporation, listed on the Hong Kong Stock Exchange
since March 1, 2012 and the Toronto
Stock Exchange since November 16,
2012. The Corporation is focused on the development of its
significant holdings of oil sands leases in the Athabasca oil sands region. The Corporation
owns interests in oil sands and petroleum and natural gas leases in
the Athabasca region of
Alberta. The Corporation is
currently focused on executing milestone undertakings in the West
Ells project area. West Ells has an initial production target rate
of 5,000 barrels per day.
FORWARD LOOKING INFORMATION
This announcement contains forward-looking information relating
to, among other things, (a) the future financial performance and
objectives of Sunshine; and (b) the plans and expectations of the
Corporation. Such forward-looking information 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 available to Sunshine, 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 Sunshine
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 announcement are not
exhaustive and readers are not to place undue reliance on
forward-looking statements as the Corporation's 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 announcement,
except as required under applicable securities legislation. The
forward-looking statements speak only as at the date of this
announcement 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 the Corporation's material risk factors, see the
Corporation's annual information form for the year ended
December 31, 2014 (the "AIF") 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 the Corporation's website at
www.sunshineoilsands.com.
SOURCE Sunshine Oilsands Ltd.