CALGARY, July 3, 2019 /CNW/ - Osum Oil Sands Corp. ("Osum" or the "Company"), a private oil sands company, announced today that it has completed an amendment with lenders to extend the maturity date of 90.6%, or approximately US$172 million, of its existing US$190 million senior secured first lien term loan by two years to July 31, 2022. The interest rate on the extended portion of the loan has been increased and will vary between LIBOR plus 7.5% and 9.5% per annum depending on the Company's debt to cash flow ratio. The remaining 9.4% of the loan, or approximately US$18 million, will continue to bear interest at LIBOR plus 5.5% per annum and mature as scheduled on July 31, 2020. Barclays acted as sole lead arranger and sole bookrunner for the transaction.
Commenting on the debt extension, Steve Spence, President and CEO of Osum said, "Osum's ability to extend the term loan on reasonable terms in a challenging market well in advance of the maturity date reflects a strong degree of support from our lenders. Our level of debt is manageable at current commodity prices. However, until there is significant progress on resolving the current egress issues, we will be devoting much of our excess cash flow to reducing debt to ensure that we have the financial capacity to invest in our business when conditions improve."
Operationally, the Company is pleased to report that Q2 2019 production from its Orion Thermal Project in the Cold Lake oil sands region of Alberta averaged over 19,000 barrels per day, more than doubling production following the completion of the Phase 2BC expansion in Q3 2018. This surpasses the facility's production target of 18,000 barrels per day and was reached well ahead of the previously stated timeline of September 2019.
About Osum:
Established in Alberta in 2005, Osum Oil Sands Corp. is a private oil sands producer focused on the responsible application of in-situ recovery technologies within Canada's oil sands and carbonates. Additional information on the company is available at www.osumcorp.com.
Cautionary Information and Forward Looking Statements
Certain statements contained in this press release may contain projections and "forward-looking statements" within the meaning of that phrase under Canadian and U.S. securities laws. When used in this document, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", "project" and similar expressions, may be used to identify forward-looking statements. Forward-looking statements in this press release may include, but are not limited to, expected future interest rates, the expected use of excess cash flow and the Company's ability to manage debt. By their nature, those statements reflect management's current views, beliefs and assumptions and are subject to certain risks, uncertainties, known and unknown, and assumptions, including, without limitation, assumptions about expected cash flows, expected production levels or conditions, expected economic life of the Orion Thermal Project, retaining a high quality, experienced management and operating team, production delays, changing environmental and other regulations, the ability to attract and retain business partners, the ability to exploit hydrocarbon resources with available technology, the need to obtain and maintain proprietary rights over aspects of the technology, competition from other technologies, the ability to access the capital required for project development, research, technology development, operations and marketing, financial position, predictions of future actions or plans or strategies, and changes in energy prices and currency levels.
Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the projections or forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated, projected or expected. Osum does not intend and does not assume any obligation to update these forward-looking statements whether as a result of new information, plans, events or otherwise, except as required by law.
The Company's securities are not traded on any stock exchange, and thus Osum is not subject to regulation by any Canadian stock exchange. Osum is not a reporting issuer anywhere in Canada and its securities are not registered under the United States Securities Act of 1933. As a result, the Company is not presently subject to the reporting, certification or other requirements imposed on reporting issuers in Canada or U.S. securities legislation including U.S. registered issuers under, among other things, applicable Canadian securities legislation or the U.S. Sarbanes-Oxley Act of 2002. This release is provided for information purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the common shares in any jurisdiction (including the United States) in which such offer, solicitation or sale would be unlawful.
SOURCE Osum Oil Sands Corp.
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