osum corporate presentation - august, 2020 · the preparation of an evaluation requires the use of...
TRANSCRIPT
Delivering GrowthOSUM OIL SANDS CORP. | AUGUST 2020 CORPORATE PRESENTATION
Osum Oil Sands Corp.
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.
Reserves
The reserve estimates herein were extracted from reports prepared by GLJ Petroleum Consultants Ltd. (GLJ), an independent professional petroleum
engineering firm, in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (COGEH), with
an effective date of April 30, 2020. 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. 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 defin itions 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.
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Osum Oil Sands Corp.
A Growing Oil Business
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QUALITY THERMAL ASSETS LOW DECLINE, LONG LIFE PRODUCTION
OVER 19,000 BPD (H1 2020 AVERAGE)
SOLID FINANCIAL POSITION
GOOD LIQUIDITY, SUBSTANTIAL FREE CASH
FLOW AND FALLING DEBT
FUTURE GROWTH POTENTIAL
APPROVAL FOR 60,000 BPD WITH 698 MMBBL
2P RESERVES IN THE COLD LAKE REGION
Osum Oil Sands Corp. 4
Corporate Overview
● Private company with a growing, robust oil
business
● Led by an experienced management team
and board of directors
● Established production and cash flow base
in the Cold Lake region of Alberta
● Near term focus is on the Orion
Steam-Assisted Gravity Drainage (SAGD)
project – pursuing further facility
debottlenecking, cost reduction and staged
growth opportunities
● Additional organic growth opportunities
include the nearby Taiga SAGD project and
extensive holdings in the Grosmont
carbonate formation
● Development approach balances financial,
social and environmental priorities
Osum Oil Sands Corp.
The Orion Project
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● SAGD project consisting of a central
processing facility and five well pads
● A series of phased brownfield expansions
have enabled growth with lower risk and
capital intensity
● Since acquiring Orion in 2014, Osum has
almost tripled production
● Phase 2A expansion completed on time
and on budget in Q3 2017
● Phase 2BC expansion completed ahead
of schedule and under budget in Q3 2018
● Phase 2D expansion ready for sanction in
Q2 2021
Osum Oil Sands Corp.
Production Performance
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-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Q32019
Q42019
Q12020
Q22020
Ste
am
In
jec
tio
n (
T/d
)
Bit
um
en
Pro
du
cti
on
(b
bl/d
)
Bitumen Production Steam Injection
Note: Lower Q2 2020 steam injection and bitumen production reflects Osum’s decision to voluntarily reduce volumes in April
due to low oil prices.
Osum Oil Sands Corp.
Cold Lake Production Growth
• Current production capacity of 20,000 BPD requires minimal
sustaining capital
• The next staged growth opportunities are expected to
increase production to 25,000 BPD (Phase 2D)
• The Taiga Project will follow Orion and has regulatory
approval for 35,000 BPD
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ORION PHASE 2BCCOMPLETED
ORION PHASE 2ACOMPLETED
9,000 BPD
20,000BPD
25,000 BPD
35,000 BPD
TOTAL ORION AND TAIGAPRODUCTION POTENTIAL
Osum Oil Sands Corp.
SAFETY LAND
WATER AIR
Safety and Environmental Performance
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● Adopted Energy Safety Canada’s 10
Life Saving Rules as part of a broader
effort to align safety and training
practices across the industry
● Two recordable incidents in 2019 and
no lost time incidents
● No fresh water used for steam
generation
● Produced water recycle rate
approaching 90%
● Demonstrated history of driving down
GHG intensity through a focus on
efficiency and optimization
● Overall, a 39% reduction from original
facility baseline GHG intensity (2019
versus 2010)
● Phase 2ABC wells were drilled from
existing pads reducing surface
disturbance by 74% compared to the
original Phase 2 design
● More than 1000 acres reclaimed
Osum Oil Sands Corp.
Solid Financial Position
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● Since the curtailment of oil production by the Provincial
Government beginning January 1, 2019, focus has been
on strengthening the balance sheet to be positioned for
the next growth stage
● At June 30, 2020 vs. December 31, 2018*:
− US$145 million covenant light term loan (-US$56 million)
− $96 million in unrestricted cash (+$43 million)
− Undrawn US$15 million revolving loan (no change)
● Rolling 12-month commodity hedging program executed
through Q2 2021 and underway for Q3 2021, targeting
50% of net production
● Supportive shareholder base
* Start of curtailment
Osum Oil Sands Corp.
Approval for
60,000 BPD with Orion
and Taiga projects,
significant upside with
Saleski Carbonates
FUTURE
POTENTIAL
Phase 2ABC expansions
completed successfully
with additional staged
growth to follow
PATH TO
25,000 BPD
More than 19,000 BPD
at Orion*
*H1 2020 Average
ESTABLISHED
BASE OF
PRODUCTION
SOLID
FINANCIAL
POSITION
Good liquidity, substantial
free cash flow and
falling debt
A Sustainable Future
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Osum Oil Sands Corp.
Board of Directors
Name Experience
William A. Friley
Chairman
• President and Chief Executive Officer, Telluride Oil and Gas & President, Skyeland Oils
• Director, Obsidian Energy & Advanced Flow Technologies
Michael Buckingham • Managing Director, Waterous Energy Fund
• Director, Strathcona Resources
Vincent Chahley • Director, Venturion Oil, Velvet Energy & Aequitas Innovations
• Former Managing Director of Corporate Finance, FirstEnergy Capital
George Crookshank • Director, Advanced Flow Technologies
• Former Vice President of Finance and Chief Financial Officer, OPTI Canada
Andrew Kim • Chief Financial Officer, Waterous Energy Fund
• Audit Committee Chairman, Strathcona Resources
Francesco Mele • Chief Operating Officer, Azimuth Capital Management
• Director, TimberRock Energy & Altex Energy
Rob Morgan • President and Chief Executive Officer, Strathcona Resources
Adam Waterous • Chief Executive Officer and Managing Partner, Waterous Energy Fund
• Chairman, Strathcona Resources
Steve Spence • President and Chief Executive Officer, Osum
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Osum Oil Sands Corp.
Osum Oil Sands Corp. T: 403.283.3224 F: 403.283.3970
1900, 255 – 5th Avenue SW
Calgary, Alberta T2P 3G6
Facebook.com/osumcorp
osumcorp.com
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