An oil pump jack is silhouetted against the sky in the heart of Alberta’s oil sands.JASON FRANSON/The Globe and Mail
Sunshine Oilsands Ltd. has ended a year-long search for strategic alternatives after closing a debt offering it said will allow it to restart construction at its long-stalled northern Alberta energy project.
Sunshine, backed by a group of Chinese institutional and retail investors, said it no longer intends to examine potential joint ventures and asset sales, which were contemplated in August 2013 when it ran out of money while constructing its West Ells oil sands development. The company then suspended work, kicking off months of equity placements to raise cash.
This month, the company closed a $200-million (U.S.) debt financing, allowing it to repay millions of dollars to creditors and begin the estimated four months of work at West Ells before it can begin injecting steam into the bitumen reservoir. The bonds carry a pricey 10-per cent interest rate.
The initial phase of the West Ells project is designed to produce 5,000 barrels a day of bitumen.
Jeffrey Jones