NOT FOR DISSEMINATION IN THE UNITED
STATES OR THROUGH U.S. NEWSWIRE SERVICES
CALGARY,
Sept. 16, 2013 /CNW/ - US Oil Sands
Inc. ("US Oil Sands" or the "Company") (TSXV: USO), a
company focused on oil sands exploration and production in the
State of Utah, today announced the
signing of a letter of intent (the "Letter of Intent") with
Blue Pacific Investments Group Ltd., Anchorage Capital Group,
L.L.C. and Spitfire Ventures, LLC (the "Strategic
Investors"). Under the terms of the Letter of Intent, US Oil
Sands will issue up to $80 million of
common shares of the Company at an issue price of $0.15 per common share in a private placement
financing (the "Offering"). The issue price represents a 49%
premium to the 20 day volume weighted average trading price of the
Company's common shares. Collectively, the Strategic Investors
would hold approximately 63% of the issued and outstanding common
shares of the Company after giving effect to the Offering. The
Offering is expected to close on or about October 15, 2013 and is subject to the parties
entering into definitive agreements and customary closing
conditions, including due diligence as well as shareholder and TSX
Venture Exchange approval. The Strategic Investors have an
exclusivity period of forty five days within which to enter into
definitive agreements in respect of the Offering. Management and
directors of the Company unanimously support the transaction.
Upon closing, the Company's board of directors
(the "Board") shall be reconstituted to include Serafino Iacono, Ronald
Pantin, Rod Lewis,
Kevin Ulrich, and Frank Giustra. Verne Johnson, Cameron Todd and Ed
Chwyl will remain in their roles as directors of the
Company, with Verne Johnson remaining as Chairman of the Board.
Departing from the Board will be Douglas
Hunter, James Banister and
Ken Stephenson.
"This transaction is a transformational one for
our Company, as it fully funds Phase 1 of our PR Spring Project in
Utah and bolsters our Board with a
group that brings world-class expertise, financial backing and
relationships," said Cameron Todd,
CEO of US Oil Sands. "Partnering with these strategic investors has
greatly enhanced and fast-tracked the future prospects of our
Company and increased our potential to export our proprietary,
environmentally-responsible method of oil sands extraction into
other global jurisdictions, including Canada and Latin
America."
Mr. Todd added: "On behalf of the entire
Company, I wish to thank our retiring directors for the exceptional
leadership and financial support they have provided since joining
the Board over seven years ago. They have played a key role
in guiding the Company to its current level of success."
The Company intends to use proceeds from the
Offering to finalize the first phase of the commercial development
of the PR Spring Project and to accelerate future production
phases. The Company's PR Spring Property spans 32,005 acres of land
in Utah's Uinta basin and,
according to a resource report prepared by Sproule Unconventional
Limited dated April 29, 2013 and
effective as of February 28, 2013,
contains an estimated 184.3 MMbbl of discovered petroleum (bitumen)
initially-in-place. For additional information, please refer
to the Company's Form 51-101F1 - Statement of Resources Data and
Other Oil and Gas Information available on SEDAR at
www.sedar.com.
Together with funding the expenditures related
to the closing of the Offering and general corporate purposes,
proceeds raised in excess of those required to fund the PR Spring
Project allow the Company to immediately initiate corporate
development activities that may include the acquisition of or
participation in other oil sands assets located outside the
State of Utah. The Company intends
to develop oil sand resources using its patented bio-solvent
technology that achieves best-in-class environmental benchmarks and
capital efficiencies.
After giving effect to the Offering, the Company
will have 846,164,397 common shares issued and outstanding.
Canaccord Genuity Corp., EAS Advisors, LLC
through Merriman Capital, Inc., and Fiore Management & Advisory
Corp. acted as financial advisors to US Oil Sands in connection
with the Offering.
ANALYST AND INVESTORS CONFERENCE CALL
US Oil Sands will be hosting a conference call
to discuss the Offering on Tuesday,
September 17, 2013 at 10:30 a.m.
Eastern Daylight Time. To access the conference call, please
dial 1-888-231-8191. If dialing internationally (outside of
North America) the conference call
can be accessed by calling 1-647-427-7450. Participants must
request the US Oil Sands Analyst & Investor Conference
Call.
A replay of the conference call will be
available through September 23, 2013.
To access the replay, dial 1-855-859-2056 (North America) or 1-416-849-0833
(International) and enter reservation number 63838351 followed by
the number sign.
Participants will include Cameron Todd, Chief Executive Officer,
Glen Snarr, President and Chief
Financial Officer, and selected members of senior management.
BOARD OF DIRECTORS APPOINTEES
Serafino Iacono
Serafino Iacono
is the Co-Chairman and an Executive Director of Pacific Rubiales
Energy Corp. (TSX: PRE; BVC: PREC; BOVESPA: PREB) ("Pacific
Rubiales"). Mr. Iacono has been involved in the financing and
development of mining, oil and other resources projects in
the United States, Latin America and Europe for over 28 years and has raised more
than four billion dollars for
numerous natural resource projects. He is a founding member of Blue
Pacific Investments Group Ltd., which owns investments in
infrastructure, mining, oil and gas and farming assets. Currently,
Mr. Iacono is also a Director and Executive Co-Chairman of Gran
Colombia Gold Corp. (TSX: GCM) and CGX Energy Inc. (TSXV: OYL) as
well as a Director of Pacific Coal Resources Ltd. (TSXV: PAK).
Ronald Pantin
Ronald Pantin is
the Chief Executive Officer and an Executive Director of Pacific
Rubiales and has overseen its significant growth to over 130,000
boe/d of net average daily production.
Pacific Rubiales, a Canadian company and
producer of natural gas and crude oil, owns 100% of Meta Petroleum
Corp., which operates the Rubiales, Piriri and Quifa heavy oil
fields in the Llanos Basin, and 100% of Pacific Stratus Energy
Colombia Corp., which operates the La Creciente natural gas field
in the northwestern area of Colombia. Pacific Rubiales has also
acquired 100% of PetroMagdalena Energy Corp., which owns light oil
assets in Colombia, and 100% of
C&C Energia Ltd., which owns light oil assets in the Llanos
Basin. In addition, the Company has a diversified portfolio
of assets beyond Colombia, which
includes producing and exploration assets in Peru, Guatemala, Brazil, Guyana and Papua New
Guinea.
A veteran of the Venezuelan oil industry, Mr.
Pantin has held numerous high-profile positions with the Venezuelan
state-owned energy company, PDVSA, throughout his career including
Vice President of Corpoven, Vice President of PDVSA E&P,
President of CVP, President of PDVSA Exploration, President of
PDVSA Services, and Executive Vice President of PDVSA Oil &
Gas. Mr. Pantin is also a director of Pacific Coal Resources Ltd.
and CGX Energy Inc. Mr. Pantin holds Bachelors of Science
degrees in Petroleum Engineering and Management Science from
Mississippi State University with the
highest distinction in 1975 and Masters of Science degrees in
Petroleum Engineering and Industrial Engineering from Stanford University in 1977.
Rod Lewis
Rod Lewis is the
founder and CEO of Lewis Energy Group ("LEG"). Mr. Lewis has been
actively involved in the oil and gas industry since 1978.
Since its inception in the early 1980s, LEG has steadily
grown and now controls over 400,000 acres of lands in the Eagle
Ford shale trend of South Texas,
together with operations in Mexico
and Colombia. In addition to
LEG, Mr. Lewis engages in other opportunities through entities like
Spitfire Ventures, LLC. Mr. Lewis is a hands‐on executive and
self‐made oil man. Aside from oil and gas, Mr. Lewis' passion is
his vintage warbird collection, known as Lewis Air Legends. Son of
an Air Force pilot, his vintage warbird collection includes 24
aircraft, most of them the classic WWII warbirds and is regarded as
one of the top vintage warbird collections in the world. He serves
on the Board of Directors for the Smithsonian Air and Space
Museum.
Kevin Ulrich
Kevin Ulrich is
the Chief Executive Officer and Portfolio Manager at Anchorage
Capital Group, L.L.C. which he co-founded in 2003 and is a Managing
Member at Anchorage Advisors Management L.L.C. Previously, he ran
the proprietary debt-trading operation at Goldman Sachs.
Frank Giustra
Mr. Giustra is President and Chief Executive
Officer of Fiore Financial Corporation, a private firm managing a
broad portfolio of private equity investments. Mr. Giustra has an
established track record of building natural resource companies
through access to capital and creative deal-making. As
President and later Chairman and Chief Executive Officer of Yorkton
Securities in the 1990s, he grew the firm into a leading natural
resource investment bank. As Chairman of Endeavour Financial from
2001 to 2007, his vision and leadership led to the successful
launch of numerous resource companies, including Wheaton River
Minerals (acquired by Goldcorp), Silver Wheaton and Pacific
Rubiales Energy. Mr. Giustra's entrepreneurial successes also
include the founding of Lionsgate Entertainment, now one of the
world's largest independent film companies. Frank Giustra is a member of the board of the
International Crisis Group, Lionsgate Entertainment, Petromanas
Energy Inc., Streetohome Foundation and a Trustee of the
Boston's Museum of Fine Arts. He
is also founder and President of The Radcliffe Foundation. In 2007, Frank Giustra and Former President Bill Clinton launched the Clinton Giustra
Enterprise Partnership, alleviating poverty in the developing world
through education, training and supply chain distribution.
ABOUT US OIL SANDS INC.
US Oil Sands is engaged in the exploration and
development of oil sands properties and, through its wholly owned
United States subsidiary US Oil
Sands (Utah) Inc., has a 100%
interest in bitumen leases covering 32,005 acres of land in
Utah's Uinta basin. The Company
plans to develop its oil sands properties using its proprietary
extraction process which uses a bio-solvent to extract bitumen from
oil sands without the need for tailings ponds.
The foregoing information contains
forward-looking information relating to the future performance of
the Company including information relating to the terms of the
Offering and the timing of completion of the Offering, changes to
the board of directors of the Company, the use of proceeds of the
Offering, the development of the PR Spring Project, resource
estimates, corporate development activities and international
opportunities. Forward looking information is subject to a number
of known and unknown risks, uncertainties and other factors that
may cause actual results to differ materially from those
anticipated in our forward looking statements. Such risks and other
factors include, among others, the actual results of exploration
activities, changes in world commodity markets or equity markets,
the risks of the petroleum industry including, without limitation,
those associated with the environment, delays in obtaining
governmental approvals, permits or financing or in the completion
of development or construction activities, title disputes,
receiving regulatory and shareholder approval for the Offering,
change in government and changes to regulations affecting the oil
and gas industry, and other risks and uncertainties detailed from
time to time in the Company's filings with the Canadian securities
administrators (available at www.SEDAR.com). Forward-looking
statements are made based on various assumptions and on
management's beliefs, estimates and opinions on the date the
statements are made. In particular, the completion and timing of
the Offering is based on a number of assumptions including
definitive agreements being entered into by the parties and all
necessary approvals being obtained from shareholders, the TSX
Venture Exchange and third parties. Should one or more of these
risks and uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described in the forward-looking information contained
herein. There is no assurance that the Offering will be completed
in the manner contemplated herein or at all. The Company undertakes
no obligation to update forward-looking statements if these
assumptions, beliefs, estimates and opinions or other circumstances
should change, except as required by applicable law.
Discovered bitumen resources or discovered
bitumen initially-in-place is that quantity of bitumen that is
estimated, as of a given date, to be contained in known
accumulations on Company lands prior to production. There is no
certainty that it will be commercially viable to produce any
portion of the resources. Additional information relating to
resource estimates is contained in the Company's Statement of
Resources Data and Other Oil and Gas Information for the year ended
December 31, 2012 dated April 29, 2013 and available on SEDAR at
www.sedar.com.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy securities in
the United States, nor shall there
be any sale of the securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful. The common shares of
the Company have not been, and will not be, registered under the
U.S. Securities Act of 1933, as amended and may not be offered or
sold in the United States absent
registration or an applicable exemption from the registration
requirements.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE US Oil Sands Inc.