HONG KONG, Nov. 13, 2013 /PRNewswire/ -- (HKEX: 2012; TSX: SUO) Sunshine Oilsands Ltd. ("Sunshine" or the "Company") today announced its financial results for the third quarter of 2013. The Company's condensed interim consolidated financial statements, notes to the condensed interim consolidated financial statements and Management's Discussion and Analysis have been filed on SEDAR (http://www.sedar.com/) and with the SEHK at (http://www.hkexnews.hk/) and are available on the Company's website (http://www.sunshineoilsands.com/). All figures are in Canadian dollars unless otherwise stated.
Highlights
Message to Shareholders
The third quarter of 2013 resulted in substantial changes and fresh challenges for Sunshine, along with new accomplishments and opportunities in some of our asset areas.
The Company had expected to be able to do a term debt financing to advance its initial projects but with market conditions for Canadian oilsands being poor, in August we announced the formation of a special committee of our Board to examine strategic alternatives available to the Company. The special committee has engaged financial advisors who are working with us to determine and progress our best opportunities to fund and develop West Ells and our other extensive opportunities.
Significant progress at West Ells and the expectation of first steam within a few months were unfortunately cut short by the difficult but necessary decision to suspend construction August 18 due to insufficient funding. With the first 5000 bpd pad of 8 well pairs already drilled and completed, drilling was completed on the second 5,000 bpd pad and the wells suspended to await completion activities. The central processing facility and the site generally have been winterized to protect the assets pending funding. With funding in place, a revised Project construction schedule and cost estimate will be executed as quickly as possible to enable commissioning and begin operations, likely within a few months of moving back on site with full construction staff.
Beyond West Ells, we have been pleased with the progress on certain of our other projects. Our second planned project at Thickwood has been approved by the Alberta government through its Order-in-Council issued in September. The Thickwood Project also has the benefit of being approved and supported by the Ft. McKay First Nation up to its maximum expected capacity of 70,000 barrels per day.
During the quarter we negotiated, and following the quarter closed and announced, a Joint Venture arrangement at our Muskwa and Godin properties. Under the terms of the JV, our new partner earns up to a 50% working interest in the properties by spending up to $250 million, or achieving production of 5,000 barrels per day, whichever comes first. The deal excludes the carbonate Oilsands rights, which remain 100% owned by Sunshine, and provides a solid indication of the potential value of our extensive properties.
We appreciate the patience and support of all of our stakeholders, particularly our vendors and suppliers, as we work through these challenging times to begin realizing the value of our large and attractive asset base, starting with our very near term operation at West Ells. We expect the enormous embedded value in our assets will galvanize potential investors and partners into participating with us as we develop that value.
We also want to thank our staff for their dedication and efforts towards the success of the Company at a difficult time. Regretfully we accepted the resignation of our Senior Vice President of Engineering and Geosciences, Mark Montemurro, and wish him the best of luck; we are searching for a replacement and in the meantime are relying on our depth of professional technical staff to carry on. We thank you for your support and believe we will secure funding to enable the completion of West Ells and then move to develop our other extensive potential.
