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Volume 234,556
August 21, 2018
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Volume
August 21, 2018
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LOCATION: ALBERTA
OPERATOR: OSUM OIL SANDS CORP.
ROYALTY: ROYALTY RATE 4%

In the third quarter of 2017 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. The royalty applies to the Clearwater formation and allows for the deduction of transportation and diluent costs associated with getting the product to market.

Orion is a Steam Assisted Gravity Drainage (SAGD) operation which began commercial production in 2007. The asset has a large resource base capable of supporting the production of heavy oil for many decades. At year-end 2017, Orion was producing approximately 9,000 barrels per day of bitumen. Production is set to increase from the implementation of phased expansions. The company recently completed Phase 2A and is currently constructing Phases 2B and 2C, which are expected to increase production to approximately 18,000 barrels per day by the end of 2019. Osum has regulatory approval for and is targeting production of up to 20,000 barrels per day with the completion of Phase 2D.

Franco-Nevada recorded revenue of $1.5 million from the effective date of September 1, 2017 to December 31, 2017. Revenue is expected to increase as the operation is expanded.

ASSET HIGHLIGHTS:

  • Long life resource located in Canada
  • Revenues expected to increase as operation is expanded

2017 2016 2015
Revenue to Franco-Nevada ($ million)1 $ 1.5 $ – $ –