Sunshine Announces Definitive Joint Operating Agreement for Muskwa and Godin
Definitive Joint Operating Agreement for Muskwa and Godin Areas
CALGARY, Alberta and HONG KONG, Oct. 20, 2013 /CNW/ - Sunshine Oilsands Ltd.
("Sunshine" or the "Corporation") (HKEX: 2012, TSX: SUO) is pleased to
announce that it has signed its previously announced joint operating agreement
("JOA") with Renergy Petroleum (Canada) Co., Ltd., ("Renergy") an affiliate of
Changjiang Investment Group Co., Ltd. ("Changjiang") with respect to the
Corporation's Muskwa and Godin area oil sands leases ("Leases"). Excluded
from the JOA are all of Sunshine's oil sands rights within the carbonate
formations contained within the Leases.
Renergy will operate the assets under the JOA as the Operator. In return for
a 50% working interest, Renergy has agreed to fund 100% of the initial joint
operations conducted on the lands up to a maximum of CAD $250 million (the
"Commitment Cap"), which funding shall be deployed at the discretion of
Renergy, as Operator, until the earlier of the point when (i) the sum
contributed equals the Commitment Cap or (ii) average daily production from
the lands over any 20 consecutive days period equals or exceeds 5,000 barrels
per day (the "Production Target").
The working interest transfer is not expected to result in any accounting gain
or loss due to the accounting treatment of the transaction.
The JOA sets an outside date (the "Outside Date") where the first planned
phase of discrete operations ("Phase One") shall be deemed to end if either
the Commitment Cap has not been reached or the Production Target has not been
achieved, which date is the earlier of: (i) three years from receipt of all
required regulatory approvals in respect of Phase One; and (ii) six years from
the date of the JOA; as may be extended by events of force majeure.
In the event that the Commitment Cap or Production Target is not reached by
the Outside Date, Renergy's working interest shall be reduced to that
percentage obtained by multiplying 50% by the greater of (i) the sum of money
in Canadian dollars contributed by Renergy under the JOA divided by CAD $250
million and (ii) the average daily production from the lands under the Leases
over a 20 consecutive days period divided by 5,000 (the extent of any such
reduction, the "Working Interest Clawback").
In the event that Renergy's working interest is reduced pursuant to the
Working Interest Clawback by 10% or more, Sunshine has the right to cause
Renergy to resign as the Operator and Sunshine to become the Operator.
Sunshine's Board of Directors is pleased that the opportunity in its Muskwa
and Godin areas has been recognized through this significant agreement to
provide both capital and other commitments.
To the best of the directors' knowledge, information and belief having made
all reasonable enquiry, Renergy and Changjiang and the ultimate beneficial
owner of Renergy and Changjiang are, as at the date of this announcement,
third parties independent of Sunshine and not connected persons of Sunshine
(as defined in the Listing Rules).
Changjiang is a conglomerate, which was founded in 1997, with its business
scope in manufacturing, trading and investment. Major businesses of
Changjiang include steel, chemical, mining, shipbuilding and import-export
businesses. Changjiang has also invested in futures companies, private equity
funds, infrastructure companies and high-tech companies.
Sunshine confirms that it is continuing in its active efforts to secure
additional financing to fund the recommencement of West Ells project
ABOUT SUNSHINE OILSANDS LTD.
Sunshine Oilsands Ltd. is one of the largest holders of oil sands leases by
area in the Athabasca oil sands region, which is located in the province of
Alberta, Canada. Since Sunshine's incorporation on 22 February 2007, Sunshine
has secured over one million acres of oil sands leases (equal to approximately
7% of all granted leases in this area).
Sunshine's principal operations are the evaluation, 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
All cash values are expressed in Canadian dollars, unless otherwise indicated.
Email: firstname.lastname@example.org Website: www.sunshineoilsands.com
FORWARD-LOOKING INFORMATION AND DISCLAIMER
This announcement may contain 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 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 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
announcement, except as required under applicable securities legislation. The
forward-looking statements speak only as of 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 our material risk factors, see "Risk
Factors" in our most recent Annual Information Form, "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 .
This document does not constitute and is not an offer to sell or a
solicitation of an offer to buy common shares of Sunshine in the United States
(including its territories and possessions, any State of the United States and
the District of Columbia) or elsewhere.
SOURCE Sunshine Oilsands Ltd.
Sunshine Oilsands Ltd., Mr. John Zahary, President & Chief Executive Officer,
+1-403-930-5836; Mr. David Sealock, Executive VP, Corporate Operations,
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-0- Oct/21/2013 02:24 GMT
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