Construction of the PR Spring oilsands mining project in Utah will be restarted following the successful completion of a C$12.8-million equity rights offering, owner US Oil Sands Inc. announced Tuesday.
The 2,000 bbl/d project is approximately 93% complete with remaining activities consisting primarily of on-site piping, instrumentation and electrical installation, the company says. Concurrent to and following mechanical completion, commissioning procedures will begin, followed by start-up, expected in Q4 2016.
The company announced a reduction in the pace of field construction in February in order to preserve capital. As at March 31, 2016, remaining costs to complete the project, including commissioning and start-up expenses, were estimated at US$4.9 million (C$6.4 million).
"The support demonstrated by our shareholders, both large and small, through this successful rights offering is extremely encouraging considering that the oil industry continues to face very challenging capital markets," Cameron Todd, CEO of US Oil Sands said in a statement.
"The company is now well positioned to finish construction of the PR Spring project and produce first oil before year end. We are confident that the demonstration of the company's commercial technology and resource potential will support US Oil Sands' expectation to emerge as an industry leader among the most efficient, lowest capital cost and most environmentally sustainable oil sands companies."
The company says it is also working towards a name change to better reflect its focus and strategy.
“The name US Oil Sands Inc. was chosen in 2011 after the acquisition of Earth Energy Resources Inc., to reflect the company's focus on developing oilsands properties in the state of Utah. Since that time, the company has decided to expand its focus from solely Utah to other potential development areas, such as the Athabasca region of Alberta and other international opportunities. A name change is important to better reflect the focus and strategy of the company on maximizing its use of innovate technologies in the energy industry and expanding to new geographic locations.”