Sunshine Oilsands Ltd. Announces Mid-Year Reserves and Resources Evaluations
Updated NI 51-101 compliant Best Estimate Contingent Resources increase by 62% to approximately 5 Billion Barrels, an increase of 1.9 billion barrels, and 2P Reserves increase to 445 million barrels
ALBERTA, Canada, July 4, 2012 /PRNewswire-Asia/ -- Sunshine Oilsands Ltd. ("Sunshine" or the "Company") (Stock code: 2012) today announced results of its mid-year reserves and resource evaluations, effective as of May 31, 2012. Sunshine's Proved and Probable Reserves plus Contingent Best Estimate Resources have been independently evaluated and have increased substantially above our previous evaluation results which were effective as of November 30, 2011.
Estimate of Resources
Sunshine's May 31, 2012 mid-year reserves and resource results are described and summarized below:
- Approximately 5 billion barrels of best estimate contingent resources with an aggregate pre-tax PV10% value of Cdn $6.9 billion;
- 80 million barrels of 1P (Proved) reserves with an aggregate pre-tax PV10% value of Cdn $312 million;
- 445 million barrels of 2P (Proved plus Probable) reserves with an aggregate pre-tax PV10% value of Cdn $918 million; and
- 603 million barrels of 3P (Proved plus Probable plus Possible) reserves with an aggregate pre-tax PV10% of Cdn $1.6 billion.
Pre Tax PV10% ($MM CAD)
Total Conventional Heavy Oil
"This increased level of recognition continues to confirm our belief in our asset base and the potential of our properties," said Michael Hibberd and Songning Shen, Co-Chairmen.
The aggregate associated pre tax discounted cash flows from the independent evaluators for Contingent Best Estimate Resources of approximately 5 billion barrels (increase of 1.9 billion barrels), (PV10%) is Cdn $6.9 billion (Canadian dollars), representing growth of 36% (Cdn $1.8 billion) over the November 30, 2011 estimates. Proved Reserves were evaluated at 80 million barrels, representing growth of 78 million barrels while aggregate Proved plus Probable Reserves recognition increased by 26 million barrels to 445 million barrels. The aggregate pre tax discounted cash flows for Proved reserves (PV10%) is Cdn $312 million while Proved plus Probable reserves PV10% value is Cdn $918 million.
"We have achieved significant growth in our Reserves and Resources categories in this mid-year report," said John Zahary, President and CEO. "As we are only partially delineated across several of our land areas, we intend to continue with delineation activities to expand recognition of our Resource potential and we will report the results of those activities in a timely manner. With continued progression of the implementation of our development plans in our core SAGD properties at West Ells, Legend Lake and Thickwood, we also aim to achieve growth in our Reserves recognition."
Sunshine's Proved Reserves growth since the last evaluation resulted from the January 20, 2012 regulatory approval of the West Ells commercial SAGD development facility. The West Ells facility is designed to produce 10,000 bbls/day of bitumen production and is under active construction. Sunshine's Probable Reserves additions were achieved in the Legend Area.
Sunshine realized significant increases in Best Estimate Contingent Resource recognition in both Clastics and Carbonates categories. Clastics best estimate contingent resource recognition increased by 1.2 billion barrels to 3.6 billion barrels primarily due to Harper, Opportunity and Pelican Lake additions. Carbonates best estimate contingent resource recognition increased in Sunshine's Goffer, Muskwa and Portage operating areas, adding over 700 million barrels. "We are particularly encouraged to see progression in our carbonate reservoir resource recognition, since we have captured large trends of this resource type and we are progressing our examination of suitable technologies for extraction," said John Zahary.
Sunshine Oilsands Ltd.'s reserves and resource reports, effective May 31, 2012, were independently prepared by DeGolyer and MacNaughton Canada Limited and GLJ Petroleum Consultants Ltd.
About Sunshine Oilsands Ltd.
Sunshine Oilsands Ltd., is one of the largest non-partnered holders of oil sands leases by area in the Athabasca oil sands region, which is located in the province of Alberta, Canada. Since the Company's incorporation on 22 February 2007, 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).
The Company's principal operations are the exploration, development and production of its diverse portfolio of oil sands leases. Its principal operating regions in the Athabasca area are at West Ells, Thickwood, Legend Lake, Harper, Muskwa, Goffer, Pelican and Portage. Sunshine's oil sands leases are grouped into three main asset categories: clastics, carbonates and conventional heavy oil.
Proved plus Probable Reserves
Proved plus Probable plus Possible Reserves
The value derived by an evaluator using deterministic methods that best represent the expected outcome with no optimism or conservatism. If probabilistic methods are used, there should be at least a 50% probability (P50) that the quantities actually recovered will equal or exceed the best estimate.
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.
This News Release contains 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 any words "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 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. Statements in this News Release relating to reserves and resources are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions, that the described reserves and resources, as the case may be, exist in the quantities predicted or estimated, and can be profitably produced in the future. This news release contains estimates of the Company's contingent resources. There is no certainty that it will be commercially viable to produce any portion of the Company's contingent resources. The assumptions relating to the Company's reserves and resources are contained in the reports of GLJ Petroleum Consultants Ltd. dated effective May 31, 2012 and DeGolyer and MacNaughton Canada Limited dated effective May 31, 2012. The contingencies which prevent the classification of the resources as reserves are set out in our AIF. The estimates of reserves and resources for individual properties may not reflect the same confidence level as estimates of reserves and resources for all properties, due to the effects of aggregation.
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SOURCE Sunshine Oilsands Ltd.
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