CALGARY, Alberta, June 10 (Reuters) - Osum Oil Sands Corp, aprivate energy company chaired by former Suncor Energy Inc Chief Executive Rick George, agreed on Tuesday to buyShell Canada's Orion oil sands project for C$325million ($298.11 million).
The Orion project in the Cold Lake region of northernAlberta is close to a number of other oil sands developments andhas been producing bitumen since 2007 using steam-assistedextraction methods.
In the first quarter of 2014 average production was 6,700barrels per day from 22 well pairs, and the project is expectedto be economically viable for more than 25 years.
Osum also owns the nearby Taiga Project, which has securedregulatory approval to build and operate a 35,000-barrel-per-dayfacility.
"The Orion Project is a first-class operation that willprovide Osum with significant current production and cash flow,"said Osum President and Chief Executive Officer Steve Spence.
"In the longer term, we believe that by linking Oriontogether with our nearby Taiga Project, Osum has a uniqueopportunity to build a significant production platform in theCold Lake region."
Osum was set up in 2005 and is focused on "in-situ" thermalrecovery techniques where steam is pumped into the ground toliquefy the tar-like bitumen trapped in the oil sands so it canbe pumped to the surface.
Chairman Rick George was chief executive of Suncor, Canada'slargest oil and gas company, for 21 years until his retirementfrom the company in 2012.
The Orion transaction is expected to close on or around July31. Osum has obtained financing commitments from Barclays Bank and Goldman Sachs Lending Partners for US$225 million.The balance of the purchase will be funded by cash.($1 = 1.0902 Canadian Dollars) (Reporting by Nia Williams; Editing by Jonathan Oatis)