EXHIBIT 99.1
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[LOGO - WESTERN OIL SANDS]
WESTERN OIL SANDS INC. ANNOUNCES $50.2 MILLION OFFERING OF COMMON SHARES
CALGARY, AB - JANUARY 16, 2003 - Western Oil Sands Inc. ("Western") announced
today that it has entered into an agreement to sell, to a syndicate of
underwriters led by TD Securities Inc., 2,050,000 Class A shares ("Common
Shares") at a price of $24.50 per share for gross proceeds of $50,225,000 on a
bought-deal basis. The issue will be offered in all provinces of Canada. Closing
is expected to occur on or about February 6, 2003.
This press release shall not constitute an offer to sell or the solicitation or
an offer to buy the securities in any jurisdiction in which such an offer would
be unlawful. The Common Shares offered will not and have not been registered
under the United States Securities Act of 1933 and may not be offered or sold in
the United States absent registration or an applicable exemption from the
registration requirements.
Western Oil Sands Inc. is a Canadian oil sands corporation which holds a 20%
undivided ownership in a multibillion dollar joint venture to exploit the
recoverable bitumen reserves found in certain oil sands deposits in the
Athabasca region of Alberta (the "Project"). Shell Canada Limited ("Shell") and
ChevronTexaco Corp. hold the remaining 60% and 20% ownership interests in the
joint venture, respectively. The Project, which includes facilities owned by the
joint venture and third parties, will use established processes to mine oil
sands deposits, extract and transport bitumen, and upgrade the bitumen into
synthetic crude oil and vacuum gas oil, or VGO.
The joint venture will develop the western portion of Lease 13, a large oil
sands lease in the Athabasca region of northeastern Alberta, Canada, held by the
owners and granted by the Government of Alberta. The western portion of Lease 13
contains approximately 1.7 billion bbls of proved and probable reserves and is
sufficient for 30 years of non-declining bitumen production at a rate of 155,000
barrels per day. Western is entitled to participate in future expansion
opportunities, including in respect of Lease 13 and on two other nearby oil
sands leases owned by Shell, referred to as Leases 88 and 89.
Construction has recently been completed at the Muskeg River Mine, located about
75 kilometres north of Fort McMurray, Alberta and at the Scotford Upgrader,
located near Fort Saskatchewan, Alberta. Both facilities are now in the start-up
process. Operations management has assumed responsibility for all facilities and
activities at both sites and is conducting start-up operations. Western
currently estimates that its share of Project costs, including start-up
activities and final completion of electrical heat tracing and insulation will
be approximately $1.1 billion through to the end of March 2003. Although final
Project costs will not be determined until first production of synthetic crude
oil out of the Upgrader, Western does not anticipate that such final Project
costs will differ materially from this estimate. As recently reported, first
bitumen production at the Muskeg River Mine started on December 29, 2002
followed immediately with the shipment of diluted bitumen into the Corridor
Pipeline system for delivery to the Scotford Upgrader. At the Scotford Upgrader,
commissioning and testing of the primary distillation units has been
successfully completed. Commissioning and testing of the synthetic crude units
is underway and progressing on schedule, with first production of synthetic
crude oil expected early in 2003.
The net proceeds of the offering, together with funds from previous offerings
and available credit facilities will be used to fund Western's share of
remaining costs for the Project, to provide working capital for operations and
related expenses and for general corporate purposes. Western's Management
and Board of Directors have determined that additional equity capital is
required at this time due to the fact that payments from our cost overrun and
delay insurance policies have not been forthcoming on a timely basis as
initially anticipated.
The Common Shares of Western are listed on the Toronto Stock Exchange under the
symbol "WTO".
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FOR FURTHER INFORMATION PLEASE CONTACT:
Guy J. Turcotte David A. Dyck
President and Vice President Finance and
Chief Executive Officer Chief Financial Officer
(403) 233-1700 (403) 233-1700
THIS INFORMATION INCLUDES "FORWARD LOOKING STATEMENTS" BASED UPON CURRENT
EXPECTATIONS, ESTIMATES AND PROJECTIONS OF FUTURE PRODUCTION, PROJECT START-UPS
AND FUTURE CAPITAL SPENDING, THAT INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES
WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE ANTICIPATED BY
THE CORPORATION. THESE RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO,
CHANGES IN; MARKET CONDITIONS, LAW OR GOVERNMENT POLICY, OPERATING CONDITIONS
AND COSTS, PROJECT SCHEDULES, OPERATING PERFORMANCE, DEMAND FOR OIL, GAS AND
RELATED PRODUCTS, PRICE AND EXCHANGE RATE FLUCTUATIONS, COMMERCIAL NEGOTIATIONS
OR OTHER TECHNICAL AND ECONOMIC FACTORS.
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
OR DISSEMINATION IN THE UNITED STATES