Franco-Nevada

Orion (Oil)

Osum

LOCATION: Alberta, Canada
OPERATOR: OSUM OIL SANDS CORP.
ROYALTY: ROYALTY RATE 4%

Franco-Nevada acquired a 4% GORR on the Orion Thermal Project in the Cold Lake region of Alberta from Osum Oil Sands Corp. (“Osum”) for C$92.5M in 2017. The royalty applies to the Clearwater formation and allows for the deduction of transportation and diluent costs associated with transporting the product to market.

Orion is a Steam Assisted Gravity Drainage (SAGD) operation that began commercial production in 2007. Infrastructure at the project consists of a central processing facility surrounded by several well pads which supply the plant. The asset has a large resource base capable of supporting the production of heavy oil for many decades. Osum has been expanding the production capacity at the asset in recent years, and as at year-end 2020 Orion was producing approximately ~19,000 barrels per day of bitumen. Future expansion to ~25,000 barrels per day is being contemplated by Osum as they pursue further facility debottlenecking, cost reduction and staged growth opportunities. The reserve life index at Orion is in excess of 40 years on a proven, probable, and possible basis, which does not include a significant amount of contingent resources.

Franco-Nevada recorded revenue of $5.9 million in 2020. Royalty payments are based on the WCS benchmark price and are impacted by changes in the differential with WTI as well as by the price of diluent, which is required to transport the product to market. In the spring of 2021, Waterous Energy Fund announced a successful take-over bid for Osum and therefore the Orion asset will be under new management going forward.

ASSET HIGHLIGHTS

  • Long life resource located in Canada
  • Stable year over year production volumes
  • Potential for future capacity expansion

2020 2019 2018
Revenue to Franco-Nevada ($ million)1 $ 5.9 $ 10.2 $ 3.7

1 Revenue refers only to payments made to Franco-Nevada

Orion_Map