Osum Oil Sands Corp Announces $275 Million Financing

Osum Oil Sands Corp Announces $275 Million Financing

Wednesday, August 27th 2008

Osum Oil Sands Corp, a privately-held company focused on bitumen extraction, today announced that it has closed a private equity financing for a total of CDN$275 million at a price of CDN$10.50 per share. The financing was led by Warburg Pincus LLC and included a substantial investment by Blackstone Capital Partners V LP.

Osum is currently the only junior player with a material position in the thermal trend of the Cold Lake oil sands region of Canada, where a substantial majority of the country’s current “in situ” bitumen is produced. Producers operating in the area include Imperial Oil, Canadian Natural Resources, Shell and Husky. Osum plans to file its commercial application at Cold Lake in late 2009, with first production anticipated in 2013.

Osum’s Chairman and CEO, Richard Todd, said, “The closing of this most recent financing is a positive endorsement of our quality asset base and management team. The caliber of private equity firms committed to this financing suggests a solid base of access to capital going forward for our company. These funds provide the opportunity for Osum to confidently move forward to first commercial production from our Cold Lake bitumen project of approximately 35,000 barrels per day, and to pilot production at our much larger Saleski project in the Wabasca region of Alberta., where our significant land position holds the potential to produce in excess of 150,000 barrels per day from several projects.”

Mr. Todd continued, “The Saleski carbonates are thought by many to be one of the world’s next giant oil plays, and we are well-positioned to capitalize on this opportunity to unlock a significant bitumen resource in Alberta. We expect an application will be filed for large-scale commercial development at one of our Saleski projects shortly after receipt of our first pilot results, which are expected in early 2010. In short, the financing we have received strengthens our momentum going forward, and we look forward to taking advantage of multiple opportunities ahead of us.”

The company also reported that, as part of its new financing, it is adding Jeffrey Harris and David Krieger, both Managing Directors of Warburg Pincus, and David Foley, Senior Managing Director of Blackstone to its Board of Directors. Two of the company’s existing Directors, Simon Clark and Gerry Stephenson, have agreed to step down from the Board of Directors and will join Osum’s newly formed Board of Advisors.

Jeffrey Harris stated, “On behalf of Warburg Pincus, we are thrilled to partner with Richard Todd and Osum’s highly experienced management team to help build the company into one of the premier oil sands operators in Canada. Osum presents a unique opportunity to participate in one of the few remaining independent oil sands plays of substantial scale in the primary fairway in Canada.”

David Foley, from Blackstone added, “We are pleased to have the opportunity to play an active role in funding the continued growth of a company with such significant recoverable resources and as experienced a management team as Osum’s.”

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