A ray of Sunshine

February 28, 2013

Sunshine Oilsands Ltd. (ticker SUO), the first Canadian oil-sands operator to list shares on the Hong Kong exchange, is in “advanced” talks with joint-venture partners to boost production to a potential 1 million barrels a day.

After the completion of the 2012 drilling and seismic program Sunshine has:

• Approximately 70 billion barrels of best estimate oil.
 
• Approximately 5 billion barrels best estimate contingent resource with an aggregate pre-tax PV10% value of $6.9 billion
 
• 80 million barrels of 1P (proven) reserves with an aggregate pre-tax PV10% value of $312 million
 
• 445 million barrels of 2P (proven plus probable) reserves with an aggregate pre-tax PV10% value of $918 million
• 603 million barrels of 3P (proven plus probable plus possible) reserves with an aggregate pre-tax PV10% of $1.6 billion
• Announced a C$390 Million 2013 Capital Budget Focused on Initiating Thermal Production

Sunshine is producing about 500 barrels a day right now. The company probably will need to invest about C$15 billion in equipment and operations as it boosts production.

Commentary

Sunshine is a portend for the future. Chinese capital + Canadian expertise to exploit a northern resource, in this case the oil sands using SAGD technology. The company’s presentation shows a high degree of concern with the environment and advocates minimizing air and water impacts.

Sources

• a)http://www.bloomberg.com/news/2013-02-28/sunshine-oilsands-taps-china-for-output-boost-corporate-canada.html



• b)http://www.sunshineoilsands.com/