Grizzly Oil Sands ULC

Grizzly Oil Sands ULC

January 31, 2012 17:45 ET

Grizzly Oil Sands Announces Purchase of May River Property

CALGARY, ALBERTA--(Marketwire - Jan. 31, 2012) - Grizzly Oil Sands ULC. announces that it has entered into an agreement with Petrobank Energy and Resources Ltd. to purchase its May River property, which includes 18,250 hectares (46,720 acres) of high quality oil sands leases, for gross cash proceeds of $225 million subject to normal closing adjustments.

McDaniel and Associates Consultants Ltd. last year provided Petrobank with an estimate of 90.6 million barrels of probable reserves for the leases and 624 million barrels of best estimate contingent resource based on SAGD development. Grizzly intends to develop the lease using SAGD recovery technology and its ARMS development model.

Grizzly's Chief Executive Officer, John Pearce, commented, "The May River lease adds substantially to the magnitude and quality of Grizzly's existing portfolio of projects, which, upon completion of the transaction will include approximately 800,000 net acres of oil sands leases and nearly 3 billion barrels of reserves and resources. Following closing of the transaction, Grizzly intends to begin the work necessary to file a regulatory application for full field development. The ARMS development model is an ideal template for the development of the May River lease and the inherent capital efficiencies and portability of the facilities will allow Grizzly to develop a very large scale project."

Grizzly's first ARMS plant is under construction for Phase one of the Algar Lake SAGD project which is on budget and on schedule for first production in 2013.

The transaction is subject to satisfaction of certain standard conditions, including receipt of required regulatory approvals, and is expected to close by the end of February 2012. Financing will be provided by Grizzly's existing shareholders, investment funds managed by Wexford Capital LP and Gulfport Energy Corporation (NASDAQ - GPOR).

Grizzly Oil Sands ULC. is a private, Calgary-based oil sands exploration and production company focusing primarily on the development of oil sands resources using thermal recovery methods. Grizzly's Advanced, Re-locatable, Modular and Standardized (ARMS) plant design was developed to improve capital efficiency, development schedule and operating metrics for its SAGD projects.

Contact Information

  • Grizzly Oil Sands ULC.
    John Pearce
    Chief Executive Officer