Sunshine Oilsands Ltd. Announcement of results for the fourth quarter and the year ended December 31, 2013

Sunshine Oilsands Ltd. Announcement of results for the fourth quarter and the 
year ended December 31, 2013 
HONG KONG, March 26, 2014 /CNW/ - Sunshine Oilsands Ltd. (the "Corporation" or 
"Sunshine") (HKEX: 2012; TSX: SUO) today announced its financial results for 
the fourth quarter and year ended December 31, 2013. 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 SEHK (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 
at an effective date of December 31, 2013 as evaluated by GLJ Petroleum 
Consultants Ltd. and DeGolyer and MacNaughton Canada Limited and 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 25, 2014 in Hong Kong. All figures are in Canadian dollars unless 
otherwise stated. 
Message to Shareholders 
Sunshine continued to achieve significant milestones in 2013. While our 
near-term focus is on securing financing to complete our first 10,000 bbl/d 
commercial SAGD project at West Ells, our ongoing objective is to lay the 
groundwork for delivering multi-phase expansions of production in our key 
project areas. 2013 was a year in which high quality construction activities 
progressed with confirmation that technical planning and execution decisions 
were managed very well by our experienced field operations and drilling and 
completions teams. 2013 also saw a strategic joint venture secured for 
development of our Muskwa and Godin area clastics assets and regulatory 
approval was obtained for a 10,000 bbl/d SAGD project in our Thickwood area. 
On the capital raising side, in addition to raising HK$246.3 million (CAD$ 
33.3 million) in gross equity proceeds from options exercises and equity 
placements in 2013, a further HK$308.1 million (CAD$43.7 million) of gross 
equity proceeds has been closed since January 1, 2014. Our technical execution 
at West Ells, particularly in sub-surface activities related to pad drilling 
and completions, is a notable area of achievement in 2013. Although execution 
quality has been at a very high level, we experienced serious deficiencies in 
budget estimation and construction change control. We have made changes to 
ensure that go-forward budget and capital management requirements are 
addressed in a rigorous manner. 
Reserves & Resources 
Reserves and resources evaluations, dated December 31, 2013 have been 
completed by independent evaluators, GLJ Petroleum Consultants (GLJ) and 
DeGolyer and MacNaughton Canada Limited (DMCL).  The following tables 
summarize the overall reserves information as well as contingent resource 
volumes. 


    Reserves, Effective December 31, 2013
          Reserves
          Proved               Proved Plus Probable Proved Plus Probable
                                                    Plus Possible
          Gross    PV10% ($MM) Gross    PV10% ($MM) Gross    PV10% ($MM)
          (MMbbls)             (MMbbls)             (MMbbls)
    Total 79       249         444      461         579      987
    Source: GLJ Report and D&M Report dated December 31, 2013

Compared to 2012 reserves volumes, there was no major change in the assignment 
of reserve volumes by the independent reserves evaluators.  Properties with 
assigned reserves include the West Ells, Thickwood and Legend Lake areas.  The 
West Ells and Thickwood areas had no exploratory drilling conducted in 2013 
and as such, assigned reserves volumes remained virtually unchanged from 
numbers reported in 2012.  Exploration drilling was conducted in the Legend 
area early in 2013. Detailed technical data examination resulted in an 
adjustment in the "possible" reserves category due to identification of a 
slight thinning of Legend Lake reservoir thickness.

In connection with PV10% values, assumed price deck reductions to a starting 
point of WTI US$90 from WTI US$100 resulted in a significant decrease in 
assigned values in 2013 compared to 2012.
                                      Contingent Resources
                                      Best Estimate
                                      Gross (MMbbls)
    Economic Contingent Resources
    Total Clastics                    2,749
    Total Carbonates                  975
    Combined Total                    3,724
    Sub-Economic Contingent Resources
    Grosmont Carbonates(1)            371
    Total Contingent Resources        4,095
    Source: GLJ Report and D&M Report dated December 31, 2013
    (1) GLJ considers the estimated Contingent Resources of 371MMbbls
    (Best Estimate)
    to be sub-economic based on a 10% discount factor. At a 7% discount
    factor, these
    resources would be considered to be economic.

2013 Economic Contingent Resource recognition volumes were affected by price 
deck reductions in the Harper carbonates, which were considered economic at a 
7% discount factor using the 2013 revised prices. The sale of 50% of the 
Muskwa and Godin area clasics resources through an announced joint venture 
transaction, along with technical revisions in the Pelican Lake area holdings, 
accounted for the remaining material adjustments in Contingent Resources 
estimated in 2013 compared to 2012. As with the reserves values, values 
assigned to Sunshine's Contingent Resources were reduced due to assumed price 
deck reductions used in the evaluation reports. The starting point pricing 
assumption of WTI US$90, down from WTI US$100, resulted in a significant 
decrease in assigned PV10% values in 2013 compared to 2012.

In connection with pricing assumptions and costs used by the independent 
evaluators, the following is worth noting: WTI has averaged approximately 
US$98 year to date, well above the US$90 starting point used in the reserve 
and resource evaluation reports; the Canadian dollar is at $0.90 US but it is 
assumed to be a much stronger $0.96 US in the reserve and resource evaluation 
reports; and potential cost savings from rail transport alternatives are not 
considered in the reserve and resource evaluation reports. Sunshine is 
actively investigating the movement of crude by rail to access Maya pricing, 
which trades at a much lower discount to WTI than WCS pricing. It is our 
expectation that in connection with marketing arrangements alone, moving 
production with costs associated with railcar transportation and Maya oil 
pricing, will result in recognition of significant PV10% value increases.

WCS refers to Western Canadian Select, a heavy blended crude oil composed 
mostly of bitumens blended with synthetic crudes and diluents sold at 
Hardisty, Alberta. Maya refers to a benchmark heavy crude blend produced in 
Mexico with similar properties to WCS, with markets in the Gulf Coast.

Capital Raising Activities

From December 1, 2013 to current date, Sunshine has closed non-brokered 
private placements for aggregate gross  proceeds totaling HK$489.7 million 
(approximately CAD$68.7 million, 288,042,193 units at a price of HK$1.70 per 
unit).  Each unit consisted of one Class "A" common share and one-third of one 
purchase warrant.  Each of the 96,014,064 issued purchase warrants has an 
exercise price of HK$1.88 (approximately $0.26) and is exercisable for two 
years from the date of issuance.  Sunshine granted 115,216,877 fee warrants to 
certain finders in connection with the above financing.  Each fee warrant is 
exercisable at HK$1.88 (approximately CAD$0.26) for two years from the date of 
issuance.  Sunshine also paid HK$10.1 million (approximately CAD$1.4 million) 
as 3% finder fees.

West Ells Commercial Project

Construction of Phases 1 and 2 of Sunshine's West Ells SAGD 10,000 barrel per 
day project continues to be suspended as the Corporation continues with 
initiatives to secure additional funding. Suspension of construction occurred 
during the third quarter, effective August 18th, 2013. Sunshine intends to 
continue to develop the West Ells project in two phases, Phase 1 (5,000 
bbls/d) and Phase 2 (5,000 bbls/d), with Phase 1 providing the supporting 
infrastructure for the Phase 2 major process equipment. To date, Sunshine has 
completed:
        --  Phase 1 drilling and completion of eight well pairs;
        --  Phase 2 drilling of eight well pairs;
        --  Phase 1 facility construction at 81% complete, with an
            estimated 4 months to finish;
        --  Phase 2 facility construction at 22% complete, with an
            estimated 5 months to finish;

Capital expenditures consumed our cash resources in 2013 and resulted in the 
Board of Directors making a decision to put our West Ells project into 
suspension. The suspension means that until construction activities 
re-commence, Sunshine has to contend with delays in equipment delivery, 
extended service costs and comprehensive planning dialogues with services 
providers. With our focus on achieving high quality completion of construction 
activities under more disciplined cost estimation and execution protocols, 
changes have been made to mitigate deficiencies in performance and leadership 
to ensure that completion financing can be committed with confidence in our 
cost estimates and in our coordination and management of construction site 
activities and personnel. It is expected that our West Ells project will 
proceed to completion with a high degree of focus on cost and quality control. 
Our current timing estimate, based on 81% completion of Phase 1 facility 
construction, is that re-commencement of Phase 1 construction can achieve 
commissioning, start-up and first steam in a four to five month time period. 
The second well pad would then be commissioned and first steam for Phase 2 
could be initiated shortly thereafter.

Our confidence in addressing requirements to complete West Ells has been 
re-fortified through an extensive re-examination of incurred capital costs for 
the West Ells Project, Phases 1 and 2 and we are fully engaged in a review and 
assessment of estimated costs associated with suspending and then restarting 
engineering, procurement and construction activities. Costs for recommencing 
and completing construction, commissioning & start up, costs for operations 
and the date for first steam will be finalized and released when additional 
funding is secured to support a full West Ells development plan.

Thickwood and Legend Project Areas

The Thickwood and Legend projects are each planned for first phase delivery of 
10,000 barrels per day. Regulatory approval for Thickwood was received in the 
third quarter of 2013 while Legend regulatory approval is expected in the 
first half of 2014.

Renergy Joint Venture

Sunshine is pleased that the opportunity in its Muskwa and Godin clastics 
assets has been recognized by Renergy Petroleum (Canada) Co. Ltd. ("Renergy") 
through a significant agreement to provide both capital and technology through 
a joint venture structure. Under the terms of the joint venture agreement, 
Renergy is to operate the assets. In return for a 50% working interest, 
Renergy has agreed to fund 100% of initial joint operations conducted on the 
lands up to a maximum of CAD $250 million, 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 of CAD $250 million or (ii) 
average daily production from the lands over any 20 consecutive days period 
equals or exceeds 5,000 barrels per day. Thereafter, joint venture 
contributions will be in proportion to the working interest held, unless 
Sunshine elects to be carried under the terms of the joint venture agreement.

Health, Safety and Community

Everyone associated with our field activities supports and understands the 
importance of our Health, Safety and Environment practices. Our approach to 
sustainable resource development works in tandem with our Health, Safety and 
Environment practices and these practices form the basis for our physical 
presence in  communities in which we work. It also forms the basis for 
ensuring that trusted long-term relationships are protected in communities 
that should expect to receive respect as well as economic and social benefits 
from our activities.

With a daily average 400 workers active from January to August 2013, the West 
Ells project logged over 1 million hours of work, with no lost time injuries 
in 2013.  This is a standard we want to maintain.

Summary of Financial Figures

For the fourth quarter of 2013, the Corporation had a net loss of $7.5 million 
compared to $9.2 million for the same period in 2012, representing a net loss 
per share of $0.00 for both periods. For the year ended December 31, 2013, the 
Corporation had a net loss of $32.8 million compared to $61.7 million in 2012, 
representing a net loss per share for each respective year of $0.01 and $0.02.
    As at December 31, the Corporation notes the following selected
    balance sheet figures:
                                      2013     2012
                                      ($000s)  ($000s)
    Cash and cash equivalents         15,854   282,231
    Exploration and evaluation assets 376,912  366,668
    Property and equipment            634,672  327,971
    Total liabilities                 148,415  108,650
    Shareholders' equity              880,973  871,076

2014 Outlook

The Corporation's plan for 2014 is to secure financing to re-commence West 
Ells construction and to ensure continuation of safe, high quality operational 
performance. We are committed to proceeding based on properly budgeted and 
monitored protocols and we intend to continue to look for opportunities for 
joint ventures to reduce our capital commitments and to accelerate activities 
aimed at increasing production. Once financing is secured, we intend to target 
achievement of first steam at West Ells later in the year. This will establish 
our own key marker line for confirming the achievability of increases in value 
for our shareholders in a deltaic clastics depositional environment.

Acknowledgements

We would like to thank our shareholders, new and old, for their continued 
support and patience. We would also like to acknowledge and thank our Board of 
Directors for their unwavering support for taking decisive actions to address 
challenges we encountered in 2013. We intend to ensure that the loyalty and 
hard work of our staff, along with the support shown by our vendors and 
contractors, results in achievement of a significant goal: "getting back to 
work on West Ells".
    Michael J. Hibberd Songning Shen David Sealock
    Co-Chairman        Co-Chairman   Interim President & CEO

FORWARD-LOOKING INFORMATION AND DISCLAIMER

This presentation (the "Presentation") contains forward-looking information 
relating to, among other things: (a) the future financial performance and 
objectives of Sunshine Oilsands Ltd. ("Sunshine" or the "Corporation"); 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 Presentation 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 Presentation, 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 (AIF), "Risk Management" in our current MD&A for the year 
ended December 31, 2013 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.

In addition, information and 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 reserves and resources described exist in the quantities 
predicted or estimated, and that the reserves and resources described can be 
profitably produced in the future. The assumptions relating to Sunshine's 
reserves and resources are contained in the reports of GLJ Petroleum 
Consultants Ltd. and DeGolyer and MacNaughton Canada Limited, each dated 
effective December 31, 2013.  For additional information regarding the 
specific contingencies which prevent the classification of Sunshine's 
contingent resources as reserves see "Statement of Reserves Data and Other Oil 
and Gas information" in our most recent AIF.  The estimates of reserves and 
future net revenue for individual properties in this New Release may not 
reflect the same confidence level as estimates of reserves and future net 
revenue for all properties, due to the effects of aggregation.  "Contingent 
Resources" has the meaning given to that term in the AIF.

About Sunshine Oilsands Ltd.

Sunshine Oilsands Ltd. (the "Corporation" or "Sunshine") is a Calgary based 
public company, listed on the SEHK since March 1, 2012 and the Toronto Stock 
Exchange since November 16, 2012. Sunshine is focused on the development of 
its significant holdings of oil sands leases in the Athabasca oil sands 
region. The Corporation owns interests in approximately one million acres of 
oil sands and P&NG leases in the Athabasca region. 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, which will be followed immediately by an approved expansion to a planned 
production capacity of 10,000 barrels per day. In addition to West Ells 
activities, Sunshine has received regulatory approval to the Thickwood 10,000 
barrels per day SAGD project and has an additional 10,000 barrels per day 
application in regulatory review for Legend.

Website: www.sunshineoilsands.com



SOURCE  Sunshine Oilsands Ltd. 
Mr. David Sealock, Interim President & CEO, Tel: (1) 403 984 1450, Email: 
investorrelations@sunshineoilsands.com 
http://www.sunshineoilsands.com 
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CO: Sunshine Oilsands Ltd.
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-0- Mar/27/2014 03:29 GMT
 
 
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