Warburg & Blackstone Back Osum Oil Sands

Osum Oil Sands Corp., a Canadian bitumen extraction company, has raised C$275 million in private equity funding, at a price of C$10.50 per share. Warburg Pincus led the transaction, and was joined by The Blackstone Group




Osum Oil Sands Corp (“Osum”), 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 (“Warburg Pincus”) and included a substantial investment by Blackstone Capital Partners V LP (“Blackstone”).


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.”


About Osum:


Osum Oil Sands Corp. is a privately held Alberta based company with approximately 11 billion barrels of bitumen in place net to Osum, focused on the application of in situ recovery technologies to bitumen extraction. Osum's mission is to provide secure, safe energy to North Americans through innovative and environmentally responsible business practice. For more information, please visit www.osumcorp.com.


About Warburg Pincus:


Warburg Pincus has been a leading private equity investor since 1971. The firm currently has more than $35 billion of assets under management. Over the past 20 years, Warburg Pincus has invested more than $3.4 billion in more than 30 companies in the energy-sector worldwide. The firm has been the lead investor in numerous successful public and private oil and gas exploration and production companies, including: Newfield Exploration Co., Spinnaker Exploration, Inc. (since acquired by Norsk Hydro ASA), Encore Acquisition Company, Bill Barrett Corp., MEG Energy Corp., Antero Resources Corp., and Canbriam Energy. Warburg Pincus has an active portfolio of more than 125 portfolio companies, and has offices in Beijing, Frankfurt, Hong Kong, London, Mumbai, New York, San Francisco, Shanghai and Tokyo. For more information, please visit www.warburgpincus.com.


About Blackstone:


Blackstone is one of the world's leading investment and advisory firms with total assets under management of approximately $119 billion and a long and distinguished track record of investing in the energy sector. Blackstone seeks to create positive economic impact and long-term value for its investors, the companies it invests in, the companies it advises and the broader global economy. Blackstone's alternative asset management businesses include the management of corporate private equity funds, real estate funds, hedge funds, funds of funds, debt funds, collateralized loan obligation vehicles (CLOs) and closed-end mutual funds. The Blackstone Group also provides various financial advisory services, including mergers and acquisitions advisory, restructuring and reorganization advisory and fund placement service. Further information is available at www.blackstone.com.