CALGARY, April 22, 2014 /CNW/ - US Oil Sands Inc. ("US
Oil Sands" or the "Company") (TSXV: USO), a company
focused on oil sands exploration and production in Utah, today announced approval of its U.S.
patent application and the filing of its 2013 independent resource
evaluation report.
"The successful approval of our U.S. patent application marks
another important step towards reinforcing our Company's
environmental and cost-effective technological advantages in the
oil sands mining space," said Cameron
Todd, CEO of US Oil Sands. "We believe our bio-solvent based
approach to oil sands extraction is a true game changer for the
industry, as it has the dual-benefit of reducing the environmental
footprint of an oil sands project and lowering capital expenditures
by as much as 75% when compared to existing oil sands mining
projects."
Approval of United States Patent Application
US Oil Sands has received notification from the United States
Patent and Trademark Office ("USPTO") that allows the Company's
U.S. patent application relating to its bitumen extraction process.
The Company will be formally issued the patent after the Company
finalizes issuance procedures with the USPTO.
The Company has previously been granted a patent by the Canadian
Intellectual Property Office in 2012 and has completed the
international filing of a patent application through World
Intellectual Property Organization (WIPO) in October 2007.
The approval of the U.S. patent application and the granting of
a Canadian patent provides a key, strategic advantage for the
Company, as no commercial oil sands mining process has yet been
implemented that can operate with the overall reduced environmental
footprint that US Oil Sands' process provides. In addition, the
Company believes its low capital cost allows the Company's
extraction process to be economically deployed to a broad range of
smaller deposits, previously deemed out of reach for oil sands
mining operations using traditional extraction processes.
US Oil Sands' 32,005 acres of bitumen leases in Utah's Uinta Basin make it the largest bitumen
lease-holder of State lands in the U.S., and the Company's
permitted PR Spring Project is expected to be the first commercial
bitumen extraction project in the U.S. US Oil Sands' extraction
process is effective on both oil-wet deposits such as those found
in the US and internationally, and water-wet deposits such as those
found in Canada's Athabasca region. Traditional extraction
processes, developed decades ago, are effective on the water-wet
oil sands found in Canada,
however, they remain economically and environmentally ineffective
at extracting bitumen from oil-wet deposits that are found in other
parts of the world. Following commercial production of Phase 1 of
the PR Spring Project, expected in 2015, the Company intends to
expand deployment of its proprietary process outside the
State of Utah.
Resource Evaluation Report
The Company engaged Calgary-based Sproule Unconventional Limited
("Sproule") to complete an independent resource evaluation
reportdated February 28, 2014 (the
"Sproule Report") incompliance with National Instrument 51-101 -
Standards of Disclosure for Oil and Gas Activities. The Sproule
Report details the bitumen resource assessment of the Company's PR
Spring property in Utah, as of
February 28, 2014, and incorporates
the results of the 184 wells drilled and cored on the Company's PR
Spring development block in 2011 and 2012. Sproule's independent
best estimate of discovered resource is 184.3 million barrels and
remains unchanged from the prior year.
US Oil Sands' PR Spring property lies within the State of Utah's PR Spring Special Tar Sand
Area and consists of four leases that encompass 5,930 acres.
The Company also holds leases on an additional 26,075 acres that
have not been explored and therefore not evaluated in the Sproule
Report. US Oil Sands currently holds 100% working interest in
its Utah-based assets.
Sproule's resource assessment of the evaluated areas is listed
below:
DISCOVERED
PETROLEUM (BITUMEN) INITIALLY-IN-PLACE(1), P.R. SPRING
LEASE, UTAH
AS OF February 28, 2014
|
Development
Area
|
Area
(acres)
|
Best
Estimate(2) (MMbbl)
|
Permitted Mine Plan
Area(3):
|
|
|
North Pit
|
61.8
|
4.5
|
West Pit
|
30.5
|
2.3
|
Sub-total
|
92.2
|
6.8
|
Mine Plan Area yet to
be permitted (4):
|
|
|
South Pit
|
66.7
|
2.7
|
Proposed and
Permitted Mine Plan Area Sub-Total
|
159.0
|
9.5
|
Area without formally
submitted Mine Plans(5)
|
5,771.0
|
174.8
|
TOTAL
LEASE
|
5,930.0
|
184.3
|
Notes:
|
|
|
|
(1)
|
Discovered petroleum
initially-in-place (equivalent to Discovered Bitumen
Initially-in-Place ("BIIP")) is that quantity of petroleum that is
estimated, as of a given date, to be contained in known
accumulations on Company lands prior to production. The petroleum
type for this property is crude bitumen.
|
(2)
|
These are the gross
best estimate total BIIP in place within the lease and/or proposed
and permitted mine area on the Company-interest lands, without
regard for working interests, royalties or other
encumbrances.
|
(3)
|
The Company
anticipates production will begin in 2015. The Company is
currently optimizing the mine design pit sequencing to open the
initial pit with the least overburden and most attractive TV:BIP
ratio.
|
(4)
|
High-density
(2.5-acre spacing) drilling has been completed for this area and
detailed mine planning is currently being undertaken by Norwest
Corporation; however, an application has not yet been made for a
revision to the Company's existing mining permits to include this
area; as such, there is no certainty at this time that this area
will be developed.
|
(5)
|
This area has been
defined on an exploratory 40-acre spacing, with some ~10-acre
infill coring in proposed future pit areas. The ~10-acre spacing
used is adequate for initial pit delineation and estimation of
recoverable ore volumes. High-density pre-production drilling and
detailed mine plans have not yet been developed for this area; as
such, there is no certainty at this time that this area will be
developed; if developed, there is no certainty that it will be
commercially viable to produce any portion of these resources.
There is no certainty that any portion of the resources will be
developed or, if developed, there is no certainty as to the timing
of such development or whether it will be commercially viable to
produce any portion of the resources.
|
The in-place volumes within the current mine plan areas have
been classified as discovered resources, based on core hole data,
assays, test pit results, outcrop data and geological mapping.
Although it is not possible to identify either the exploitable
portion of the discovered resources or the recoverable portion of
those resources until the final mine plans are incorporated into
the geological model, Sproule is confident that contingent
resources will be assigned to the three proposed and permitted mine
pits once this has been done. In 2011, the Company identified four
additional prospective mine pit areas that were further delineated
with infill coring in 2012 and are currently undergoing design
configuration and recoverable resource quantification. Since that
work is expected to closely follow this assessment, Sproule
believes the most specific classification, as of the effective date
of this report, is discovered resources. Until a forthcoming
economic evaluation is completed, there is no certainty that it
will be commercially viable to produce any portion of these
resources.
ABOUT US OIL SANDS LTD.
US Oil Sands is engaged in the exploration and development of
oil sands properties and, through its wholly owned United States subsidiary US Oil Sands
(Utah) Inc., has a 100% interest
in bitumen leases covering 32,005 acres of land in Utah's Uinta Basin. The Company plans to
develop its oil sands properties using its proprietary extraction
process which uses a bio-solvent to extract bitumen from oil sands
without the need for tailings ponds. The Company is in the
pre-production stage, anticipating the commencement of bitumen
production and sales in 2015.
The foregoing information contains forward-looking information
relating to the future performance of the Company including
information relating to resource estimates, the development and
construction of the PR Spring Project, commencement of commercial
production and corporate development activities. Forward looking
information is subject to a number of known and unknown risks,
uncertainties and other factors that may cause actual results to
differ materially from those anticipated in our forward looking
statements. Such risks and other factors include, among others, the
actual results of exploration activities, changes in world
commodity markets or equity markets, the risks of the petroleum
industry including, without limitation, those associated with the
environment, delays in obtaining governmental approvals, permits or
financing or in the completion of development or construction
activities, title disputes, change in government and changes to
regulations affecting the oil and gas industry, and other risks and
uncertainties detailed from time to time in the Company's filings
with the Canadian securities administrators (available at
www.SEDAR.com). Forward-looking statements are made based on
various assumptions and on management's beliefs, estimates and
opinions on the date the statements are made. Should one or more of
these risks and uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described in the forward-looking information contained
herein. The Company undertakes no obligation to update
forward-looking statements if these assumptions, beliefs, estimates
and opinions or other circumstances should change, except as
required by applicable law.
Discovered bitumen resources or discovered bitumen
initially-in-place is that quantity of bitumen that is estimated,
as of a given date, to be contained in known accumulations on
Company lands prior to production. Best estimate is considered to
be the best estimate of the quantity that will actually be
in-place. It is equally likely that the actual remaining
quantities in-place will be greater or less than the best estimate.
There is no certainty that it will be commercially viable to
produce any portion of the resources. Additional information
relating to resource estimates is contained in the Company's
Statement of Resources Data and Other Oil and Gas Information for
the year ended December 31, 2013
dated April 4, 2014 and available on
SEDAR at www.sedar.com.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE US Oil Sands Inc.