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US Oil Sands Searching for Capital for PR Spring Project

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US Oil Sands Inc. announced that it has filed its unaudited interim financial statements for the three and six-month periods ended June 30, 2016 along with the management discussion and analysis of the financial results of US Oil Sands for such period.

The second quarter for US Oil Sands was focused on closing its equity rights offering for gross proceeds of C$12.8 million and planning for and the resumption of full construction activities at the PR Spring Project.

Q2 2016 Highlights

• Continued scaled-down construction activities on the Project with internal operations personnel focused on critical path items until completion of financing;
• Received an independent resource evaluation report effective December 31, 2015, in respect of the Project and the Company's 100% interest in bitumen leases located in Utah's Uinta Basin PR Spring Special Tar Sand Area, that upgraded a portion of the Company's 184.3 million barrels of discovered resources to contingent resources with a risked, best estimate NPV10 of $87.4 million on recovery of 9.6 million barrels from 12.5 million barrels discovered;
• Completed the Rights Offering on May 31, 2016 by issuance of 853,142,395 common shares at a price of C$0.015 or US$0.012 per share for gross proceeds of C$12,797,136;
• Recommenced full construction activities on the Project;
• Further evaluated downstream markets for the PR Spring bitumen, including asphalt and alternative fuels;
• Continued to refine and optimize the shop demonstration unit at the Grande Prairie Technology Centre, including commissioning a solvent recovery unit; and
• Submitted provisional patent applications to enhance the Company's patent protection.

The Company commenced a planned reduction of site activity in March 2016 with the aim of conserving capital. The reduction in the pace of construction allowed the Company to re-evaluate planned aspects of the Project and construction activities, as well as maintain liquidity until additional financing was obtained. Some construction activities continued with internal operations personnel during this period until May 31, 2016 when the Rights Offering was completed. After successful completion of the Rights Offering, construction was resumed at full capacity. The Project is nearing completion with remaining activities focused on piping, instrumentation and electrical installation.

Upon completion of the Project, the Company will have limited working capital for funding of Project operations and ongoing corporate G&A costs. In light of the continued low oil price environment, the Company anticipates requiring additional capital. The Company is evaluating alternatives to fulfill this capital need.

Outlook

• The Company will complete construction, commission, start-up and operate Phase 1 of the PR Spring Project. Field assembly will continue for the remainder of Q3 2016, followed by commissioning and commercial start-up in Q4 2016.
• The Company is focused on its primary success measures and ensuring these are met as the Company looks forward to first bitumen production. Proving the commercial viability of the Company's patented and unique technology is expected to open the opportunities for future developments in other oil sands areas outside of Utah, in addition to capacity expansion on the Company's Utah production. Key attributes that the Company defines as primary success measures include high oil recovery, elimination of tailings ponds, high solvent recovery and recycle rates, low capital intensity and continuous and safe operations.
• The Company continues to evaluate specific markets for sales of crude oil and other petroleum products, along with optimal product transportation logistics.
• Management will continue to investigate and pursue business development opportunities for the Company's technology, including opportunities to work with Athabasca oil sands developers to demonstrate the technology's favourable extraction outcomes. The Company will broaden its working relationships with leaseholders and government agencies supporting development of Canadian oil sands