GIC backs Canada’s Osum Oil Sands
Government of Singapore Investment Corp. (GIC) has participated in a $500 million investment in Osum Oil Sands Corp, which is looking to tap Canada’s oil sands and bitumen resources, through a private placement to a combination of new and existing investors.
GIC is among the new shareholder group, which is led by KERN Partners and also includes two large Canadian institutional investors. Warburg Pincus and The Blackstone Group were the major existing shareholders who participated. Funds and accounts managed by Blackrock Financial Management also invested a substantial amount.
The placement will consist of 21.2 million common shares at $12.50 per share for total gross proceeds of approximately $265 million as well as 18.8 million callable common share purchase warrants at a price of $12.50 apiece for additional aggregate gross proceeds of $235 million. The round of funding is expected to conclude around January 18.
It takes Osum's total fundraising since inception to more than $1 billion. The funds will be put toward the company's Saleski and Taiga operations.
The Saleski interests comprise a significant stake in the Grosmont carbonates in Alberta, Canada, which could generate an estimated 3.4 billion barrels of recoverable resources. Osum has a joint venture pilot project that is looking into the use of steam assisted gravity drainage as well as solvents to realize these resources.
The Taiga project in the Cold Lake region has 359 million barrels of proved plus probable reserves.
Credit Suisse Securities (Canada), Scotia Waterous and Barclays Capital Canada acted as placement agents for Osum. McCarthy Tetrault and Paul Weiss were Canadian and US legal counsels, respectively. Stikeman Elliot acted as legal counsel to the KERN-led shareholder group.
Canada's natural resources have proved popular with Asian sovereign wealth funds. Last year, Temasek Holdings spent $494.5 million on a 14.2% stake in Canada's Inmet Mining Corp. China Investment Corp. (CIC) invested in Canada's bitumen resources through a joint venture with Penn West Energy Trust in 2010 and paid $1.5 billion for a stake in Teck Resources a year earlier.
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