Low oil prices claim developer of citrus-based oilsands extraction method

Image: US Oil Sands

US Oil Sands Inc. said Friday it has commenced a sale solicitation process (SSP) for the sale of the company or its assets. The Calgary-based company had been promoting a citrus based bio-solvent that naturally separates bitumen from oilsands.

The technology would eliminate the need for tailings ponds, require approximately 50 per cent less energy input than traditional oilsands projects and recycle 95 per cent of the water used, the company claimed.

US Oil Sands established an initial commercial demonstration project in Utah's Uintah and Grand counties where it has a 100 per cent interest in bitumen leases covering 32,005 acres (50 square miles) of land, which it said represented the largest commercial oilsands position in the United States with a resource base in excess of 180 million barrels of discovered petroleum.

The company planned to use its PR Spring Project on its Utah property as a stepping stone as it searched for opportunities in the Athabasca region of Alberta and in other parts of the world where the nature and size of the oilsands deposits demand a low-cost, scalable extraction technology.

The company had only last summer announced it had achieved a major milestone with first production of diluted bitumen after sustaining start-up and funding delays, with market sales are expected in the third quarter.

In September, the Court of Queen's Bench of Alberta granted the application of the company's lender, ACMO S.à R.L., to appoint FTI Consulting Canada Inc. as receiver and manager over the assets, undertakings and property of US Oil Sands. In November, the United States Bankruptcy Court for the District of Utah, Central Division, issued an order under Chapter 15 of the U.S. Bankruptcy Code recognizing the Canadian proceedings as a foreign main proceeding.

And on Feb. 16, the Court of Queen's Bench of Alberta granted a sale process order authorizing the receiver to launch the SSP, which is being undertaken by the receiver's affiliate, FTI Capital Advisors - Canada ULC. The bid deadline for binding proposals is April 6.

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