Financial Performance - The recurring net loss for Q2 2021 was CAD 14.9 million, with net sales remaining at CAD 0 compared to the same period in 2020[4]. - In Q2 2021, the company reported a net loss of CAD 22.79 million, compared to a net loss of CAD 2.69 million in Q1 2021[14]. - The company reported a net loss of CAD 22.8 million for the six months ended June 30, 2021, including non-controlling interests[54]. - The net loss for the three months ended June 30, 2021, was CAD 22,789,000, compared to a profit of CAD 14,518,000 for the same period in 2020[109]. - The company reported a net loss of approximately CAD 25.5 million for the six months ended June 30, 2021[114]. Production and Sales - The company's oil sands production was 0 barrels per day in Q2 2021, resulting in zero sales of diluted oil sands heavy oil due to temporary shutdowns[2]. - The average production of oil sands heavy oil was 0 barrels per day for both Q2 2021 and the first half of 2021, a decrease of 497 barrels per day compared to the same period in 2020[18]. - Oil sands heavy oil sales averaged 0 barrels per day in Q2 2021, down from 11 barrels per day in Q2 2020, reflecting a significant decline due to temporary shutdowns[19]. - The company's realized oil sands heavy oil revenue for the six months ended June 30, 2021, decreased to CAD 100,000 from CAD 2.6 million in the same period of 2020, representing a decline of approximately 96.15%[25]. Assets and Liabilities - Total liabilities increased to CAD 604.7 million as of June 30, 2021, compared to CAD 596.2 million at the end of 2020[6]. - The company's total assets decreased slightly to CAD 753.43 million in Q2 2021 from CAD 756.21 million in Q1 2021[14]. - The company's shareholder equity decreased to CAD 148.76 million in Q2 2021 from CAD 162.51 million in Q1 2021[14]. - The company's working capital deficit as of June 30, 2021, was CAD 535.5 million[54]. Cash Flow and Financing - As of June 30, 2021, the company had cash of CAD 262,000, down from CAD 838,000 as of December 31, 2020[6]. - The company has incurred a total of CAD 36.9 million in unsecured third-party debt, equivalent to CAD 46.4 million, considered as permitted debt[50]. - The company completed the issuance of $200 million in senior secured bonds at a price of $938.01 per bond, with an annual interest rate of 10%[41]. - The company has entered into a long-term deferral agreement with bondholders representing 96% of the outstanding bonds, which includes various payment terms and conditions[42]. Cost Management - The company continues to monitor international markets and the impact of COVID-19, focusing on cost control as a key strategy[5]. - The company's operating cash flow for the first half of 2021 was a net loss of CAD 3.3 million, an improvement from a net loss of CAD 6.4 million in the same period of 2020[17]. - The company's operating costs for Q2 2021 were CAD 1.59 million, down from CAD 1.83 million in Q1 2021[14]. - General and administrative costs for the three and six months ended June 30, 2021, were CAD 1.2 million and CAD 2.9 million, respectively, down from CAD 2 million and CAD 4.4 million in 2020, a reduction of 35% and 34%[33]. Regulatory and Compliance - The company is awaiting regulatory approval for the Legend project, expected in 2021, which will require additional financing for development[12]. - The internal controls over financial reporting were deemed effective as of June 30, 2021, with no significant changes identified that could materially affect the financial reporting[68]. - The company confirmed no further impairment signs for exploration and evaluation assets or the West Ells CGU as of June 30, 2021[39]. Market Conditions and Risks - The company continues to face risks associated with resource exploration and development, which may impact its financial condition and operations[64]. - The company is actively monitoring international crude oil market developments and will take appropriate actions based on actual conditions[112]. - The company temporarily suspended production due to significant fluctuations in the international oil market and the impact of the COVID-19 pandemic[112]. Shareholder and Corporate Governance - The company has confirmed compliance with the Hong Kong Stock Exchange's corporate governance code, maintaining high standards of corporate governance[74]. - The company received independent shareholder approval for the convertible bond on May 25, 2020, with all proceeds used for general working capital and debt repayment[84]. - The largest shareholder, Mr. Sun Guoping, held 150,232,591 shares, representing 61.70% of the total as of June 30, 2021[88].

Sunshine Oilsands Ltd 陽光油 砂 有 限 公 司 * 2020 | --- | --- | |-----------------------------------------------------|-------------------------------------------------------------| | | | | SUNSHINE OILSANDS | LTD. | | | 陽光油砂有限公司 * | | | | | | (a corporation incorporated under the Business Corporations | | Act of the Province of Alberta, Canada with limited | liability) | 2020 ANNUAL REPORT ANNUAL REPORT ANNUAL REPORT 2019 2019 ANNUALREPORT 2020 年 報 SUNSHINE OILSANDS LTD. 陽光油砂有限公司* (a corporation incorporated unde ...

Production and Sales Performance - Average oil sands heavy oil production for Q2 2020 was 0 barrels per day due to a temporary shutdown, resulting in no diluted oil sands heavy oil sales[2] - The net sales of diluted oil sands heavy oil for Q2 2020 dropped to CAD 0 from CAD 14.2 million in Q2 2019, primarily due to the temporary shutdown[4] - Oil sands heavy oil sales averaged 0 barrels per day in Q2 2020, a decrease of 2,044 barrels per day compared to Q2 2019[20] - The average production of diluted oil sands heavy oil for the six months ended June 30, 2020, was 543 barrels per day[12] - The company reported a net loss of CAD 14,591,000 for Q2 2020, compared to a net income of CAD 41,770,000 in Q4 2019[16] - The diluted oil sands heavy oil revenue for the three months ended June 30, 2020, was $14.434 million, a decrease of $1.075 million compared to the same period in 2019[26] - The realized oil sands heavy oil revenue for the six months ended June 30, 2020, was $15.213 million, down from $20.451 million in the same period of 2019, representing a decline of 25.5%[26] - The average realized price per barrel of oil sands heavy oil for the six months ended June 30, 2020, was $32.27, a decrease of $23.17 per barrel compared to $55.44 in 2019[27] - The average operating netback was CAD (81.30) per barrel for the first half of 2020, a significant decline from CAD (6.53) per barrel in the same period of 2019[19] Financial Performance - The recurring net operating loss for Q2 2020 decreased by 28% to CAD 4.3 million compared to CAD 6 million in Q2 2019[4] - The company reported a net loss of CAD 14,518,000 for the six months ended June 30, 2020, compared to a net loss of CAD 34,915,000 for the same period in 2019[111] - For the six months ended June 30, 2020, the company recorded a net loss attributable to shareholders of CAD 27.1 million[56] - The company’s total liabilities amounted to CAD 618.0 million, up from CAD 601.8 million as of December 31, 2019[5] - Shareholder equity decreased to CAD 153.5 million as of June 30, 2020, from CAD 175.8 million as of December 31, 2019[5] - The company’s total assets decreased to CAD 771,561,000 from CAD 777,528,000 in Q4 2019[16] - The company’s cash position decreased to CAD 470,000 from CAD 1,254,000 in the previous year[107] - The company’s debt-to-asset ratio as of June 30, 2020, was 80%, compared to 77% as of December 31, 2019[56] - The company’s total financing costs for the six months ended June 30, 2020, were CAD 29.5 million, a decrease from CAD 32.2 million in the same period of 2019[35] Operational Challenges - The company experienced a temporary shutdown starting March 31, 2020, impacting production and sales volumes significantly[19] - The company plans to focus on improving production performance despite the challenges faced in the current market[20] - The company plans to restart operations in the Muskwa and Godin areas, which are expected to bring significant benefits under the new ownership of the joint venture[6] - The company anticipates that the temporary suspension of production for 90 days due to the COVID-19 pandemic will not have a significant adverse impact on operations[120] - The ability to continue as a going concern is contingent upon successfully refinancing or restructuring existing debt and obtaining additional financing[123] Capital Expenditures and Investments - The company has invested approximately CAD 1.29 billion in oil sands leases, drilling operations, project engineering, and other assets as of June 30, 2020[11] - Capital expenditures for Q2 2020 were CAD 431,000, an increase from CAD 299,000 in Q4 2019[16] - The total capital expenditures for the six months ended June 30, 2020, amounted to $500 million, with a non-cash expense of $(6) million, resulting in a total balance of $270,508 million[133] Debt and Financing - The company raised CAD 72 million through a convertible bond agreement with a conversion price of CAD 0.632 per share, with an annual interest rate of 8%[3] - The company incurred interest expenses of CAD 7.99 million for the three months ended June 30, 2020, compared to CAD 8.46 million for the same period in 2019[35] - The company has a convertible bond subscription agreement with a total principal amount of HKD 72 million, with an annual interest rate of 8%[59] - The company has incurred a total of $28.5 million in unsecured third-party debt as of June 30, 2020, exceeding the allowed debt limit of $15 million[52] - The company must complete a financing of $5 million by April 30, 2019, to maintain sufficient liquidity[51] Shareholder and Equity Information - The company’s total equity decreased from CAD 175.755 million as of December 31, 2019, to CAD 153.514 million as of June 30, 2020[186] - As of June 30, 2020, the company had 129,554,630 shares of Class A common stock issued and outstanding[92] - The company did not declare or pay any dividends for the six-month period ending June 30, 2020[101] - Major shareholders include Zhang Jun, holding approximately 10.71% of the issued shares with 13,881,590 ordinary shares[100] Governance and Compliance - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange regulations, with some deviations noted[76] - The company confirms compliance with the standards of the Model Code for Securities Transactions by Directors, as required by the Hong Kong Listing Rules[77] - The company has established internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reports[68] Market and Economic Conditions - The company is closely monitoring international oil market developments and will take appropriate actions based on actual conditions[120] - The company will continue to focus on cost control and adjust strategies in response to developments in the crude oil market and the COVID-19 pandemic[105] - Management has made significant judgments in preparing forecasts to support the going concern assumption, particularly regarding oil sales and prices[123]

Production and Sales Performance - For the year ended December 31, 2019, the average bitumen production was 1,702 barrels per day, with a fourth-quarter average of 1,589 barrels per day[10]. - Bitumen sales increased from CAD 4.8 million in Q4 2018 to CAD 9.2 million in Q4 2019, representing a growth of 91.7% due to increased production and sales volume[12]. - The average diluent sales for the year were 2,080 barrels per day, with a fourth-quarter average of 2,015 barrels per day[10]. - The average production of oil sands heavy oil was 1,589 barrels per day for the three months and 1,702 barrels per day for the twelve months ended December 31, 2019[178]. - The average sales volume of diluted oil sands heavy oil was 2,015 barrels per day for the three months and 2,080 barrels per day for the twelve months ended December 31, 2019[178]. - The company noted that the increase in oil sands heavy oil production and sales prices contributed significantly to revenue growth[188]. Financial Performance - The company reported a net loss of CAD 80.6 million for 2019, compared to a net loss of CAD 127.0 million in 2018, showing a 36% improvement[7]. - As of December 31, 2019, total liabilities amounted to CAD 601.8 million, up from CAD 527.3 million in 2018, indicating a 14% increase[15]. - The company reported a net loss of CAD 26.66 million for the fourth quarter of 2019, compared to a net loss of CAD 19.14 million in the third quarter[181]. - The company’s total assets were CAD 777.53 million as of December 31, 2019, with shareholders' equity at CAD 175.76 million[181]. - The total oil sales (net of royalties) for the twelve months ended December 31, 2019, increased to CAD 41,716,000 from CAD 37,007,000 in 2018, reflecting a growth of 12.0%[189]. Cost Management and Operational Efficiency - The company reported a decrease in operating costs per barrel by 54.29% for the three months ended December 31, 2019, compared to the same period in 2018[184]. - The company's total operating costs for the three months ended December 31, 2019, were 19.86 CAD per barrel, significantly lower than 43.45 CAD per barrel in the same period of 2018, indicating a 54.3% decrease[198]. - General and administrative expenses for the three months ended December 31, 2019, were 1,298,000 CAD, down 200,000 CAD from 1,498,000 CAD in the same period of 2018[200]. - The company is focused on cost management and operational efficiency, leading to a significant reduction in general and administrative costs over the year[200]. Strategic Plans and Future Outlook - The company plans to focus on cost control and improve production at West Ells, with intentions to increase output when heavy oil pricing conditions improve[21]. - The company plans to enter the second phase of the West Ells project, which will increase production by an additional 5,000 barrels per day once financing is secured[176]. - The company plans to establish 50 high-end multifunctional gas stations in Chengde City over the next three years, providing services including gasoline refueling, electric vehicle charging, and convenience stores[159]. - The company is investing in R&D for new technologies, allocating $F million towards the development of innovative solutions in the upcoming fiscal year[31]. Corporate Governance - The company has established a corporate governance committee to fulfill the functions of a nomination committee, ensuring compliance with the corporate governance code[38]. - The board consists of a diverse group of members, including executive and independent non-executive directors, ensuring a balanced decision-making process[46]. - The company has adhered to high standards of corporate governance since its listing date, with regular reviews and updates to governance practices[39]. - The board confirmed that the company has complied with corporate disclosure and trading policies throughout the reporting period[74]. Shareholder Information - As of December 31, 2019, the available reserves for distribution to shareholders were approximately CAD 252 million[103]. - The company did not declare or pay any dividends for the fiscal year ending December 31, 2019[104]. - The company has adopted a dividend policy that considers operational performance, financial condition, cash requirements, and any restrictions on dividend payments[86]. Resource Estimates - The company has identified a best estimate of contingent resources totaling 86 million barrels, with an additional 8.95 million barrels classified as temporarily deferred[20]. - The company has an estimated recoverable resource of approximately 1.63 billion barrels as of December 31, 2019, with a best estimate of 950 million barrels in the Athabasca region[176].

Financial Performance - Average production of diluted bitumen was 2,044 barrels per day in Q2 2019, with sales averaging 2,506 barrels per day[2][15] - Revenue from diluted bitumen sales increased by 56% to CAD 14.2 million in Q2 2019, compared to CAD 9.1 million in Q2 2018[6] - Net loss decreased by 69% from CAD 31.1 million in Q2 2018 to CAD 9.8 million in Q2 2019[6] - Total oil sales reached CAD 14,434,000 in Q2 2019, a 56.5% increase from CAD 9,252,000 in Q2 2018[25] - The company reported a net loss of CAD 9,799,000 in Q2 2019, significantly reduced from CAD 25,116,000 in Q1 2019[19] - The net loss for the six months ended June 30, 2019, was CAD 34,915,000, compared to a loss of CAD 63,978,000 for the same period in 2018[120] - Basic and diluted loss per share for the six months was CAD (0.01), consistent with the previous year[119] - The company reported total revenue of CAD 20,141,000 for the six months ended June 30, 2019, compared to CAD 20,250,000 in the same period of 2018[120] Production and Sales - Oil sands heavy oil sales increased to 2,049 barrels per day in Q2 2019, up 33.1% from 1,540 barrels per day in Q2 2018[24] - The average production of oil sands heavy oil was 2,044 barrels per day for the three months ended June 30, 2019, an increase of 434 barrels per day compared to the same period in 2018[23] - The average selling price of diluted oil sands heavy oil increased by 24.07%, contributing to a positive operating netback of CAD 3.55 per barrel in Q2 2019, compared to a loss of CAD 14.86 per barrel in Q2 2018[20] - The realized oil sands heavy oil revenue increased by CAD 4.2 million to CAD 10.7 million for the three months ended June 30, 2019, compared to CAD 6.5 million in the same period of 2018, with revenue per barrel rising from CAD 46.70 to CAD 57.94[29] Capital Expenditures and Investments - The company has invested approximately CAD 2.38 billion in oil sands leases, drilling operations, and project development as of June 30, 2019[14] - Capital expenditures for Q2 2019 were CAD 493,000, up from CAD 342,000 in Q1 2019[19] - The company aims to enter the second phase of the West Ells project, increasing production by an additional 5,000 barrels per day once financing is secured[13] Debt and Liabilities - As of June 30, 2019, total liabilities were CAD 563.7 million, while shareholders' equity was CAD 217.7 million[8] - The company has incurred CAD 7.48 million in municipal property tax liabilities, along with CAD 2.85 million in overdue penalties[51] - As of June 30, 2019, the company had incurred a total of $16.5 million in unsecured third-party debt, exceeding the allowed debt limit of $15 million[49] - The company's debt-to-asset ratio increased to 72% as of June 30, 2019, compared to 68% as of December 31, 2018[53] Cash Flow and Liquidity - The cash flow from operating activities showed a net cash outflow of CAD 819,000 for the six months ended June 30, 2019, compared to a net cash outflow of CAD 6,006,000 for the same period in 2018, reflecting better operational efficiency[125] - The company reported a total cash increase of CAD 306,000 for the three months ended June 30, 2019, compared to an increase of CAD 208,000 in the same period of 2018[125] - The financing activities generated a net cash inflow of CAD 2,283,000 for the six months ended June 30, 2019, compared to CAD 6,967,000 for the same period in 2018, indicating a decrease in financing activities[125] Shareholder Equity - Shareholder equity decreased to CAD 217,723,000 in Q2 2019 from CAD 227,171,000 in Q1 2019[19] - Shareholders' equity decreased to CAD 217.723 million from CAD 251.953 million, reflecting a decline of approximately 13.6%[123] Corporate Governance and Compliance - The company has adhered to the corporate governance code as per the Hong Kong Stock Exchange, with a noted deviation regarding formal appointment letters for directors[77] - The company established a Corporate Governance Committee to fulfill the functions of the Nomination Committee as per the code, ensuring compliance after appointing new members[78] Future Outlook - The company’s outlook is positive due to stabilizing international oil prices and the maturation of SAGD technology, which is expected to enhance production performance[115] - The company anticipates an increase in production in a favorable environment for diluted oil sands heavy oil netback values[115] - The company believes that the restart of the Muskwa and Godin projects could bring significant benefits following ownership changes[115] Tax and Deductions - The company has approximately CAD 1.57 billion in available tax deductions as of June 30, 2019, with unrecognized tax losses expiring between 2029 and 2038[42] - The company has a deferred tax asset net amount related to non-capital losses of $308.736 million as of June 30, 2019[173] Foreign Exchange and Currency Risk - A 1% increase or decrease in the USD/CAD exchange rate would impact the company's debt by approximately CAD 2.6 million as of June 30, 2019[198] - The company recorded an unrealized foreign exchange loss of CAD 6.004 million for the three months ended June 30, 2019, compared to a gain of CAD 5.527 million for the same period in 2018[200]

Financial Performance - The net loss for the year ended December 31, 2018, was CAD 127.0 million, compared to a net loss of CAD 281.9 million in 2017, with a loss per share of CAD 0.02[14]. - The company reported a net loss of CAD 46.7 million for the fourth quarter of 2018, compared to a loss of CAD 228.4 million in the same period of 2017[14]. - The company reported a net loss of CAD 127 million for the year ended December 31, 2018, compared to a net loss of CAD 281.9 million in 2017[81]. - The net loss for the quarter ending December 31, 2018, was CAD 5.6 million, compared to a net loss of CAD 1.4 million for the same quarter in 2017[185]. - Operating cash flow for the twelve months ending December 31, 2018, was a net loss of CAD 10.4 million, compared to a net loss of CAD 9.1 million for the same period in 2017[185]. - The average operating netback decreased by CAD 46.2 per barrel, from a net loss of CAD 6.94 per barrel to a net loss of CAD 53.14 per barrel[185]. - Cumulative losses reached CAD 1.116 billion as of December 31, 2018, up from CAD 989 million in 2017[81]. Production and Sales - For the year ended December 31, 2018, the average bitumen production was 1,059 barrels per day for the fourth quarter and 1,623 barrels per day for the full year[9]. - The average diluent sales for the fourth quarter and the full year were 1,441 barrels per day and 2,018 barrels per day, respectively[9]. - The average oil sands heavy oil production was 1,059 barrels per day for the quarter ending December 31, 2018, a decrease of 1,293 barrels per day compared to the same quarter in 2017[189]. - The average sales of oil sands heavy oil for the quarter ending December 31, 2018, was 1,153 barrels per day, down from 2,253 barrels per day in the same quarter of 2017, representing a decrease of 1,100 barrels per day[191]. - The average selling price per barrel of oil, net of royalties, dropped by CAD 18.40 to CAD 44.73 per barrel from CAD 63.13 per barrel year-over-year[193]. - For the twelve months ended December 31, 2018, oil sales, net of royalties, increased by CAD 3.4 million to CAD 37 million, compared to CAD 33.6 million in 2017[196]. - The increase in oil sales for the twelve months was primarily due to a full year's production included in 2018, compared to only ten months in 2017[196]. Assets and Liabilities - As of December 31, 2018, total liabilities amounted to CAD 527.3 million, an increase from CAD 428.8 million in 2017[14]. - As of December 31, 2018, shareholders' equity was CAD 251.9 million, down from CAD 356.6 million in 2017[14]. - The company's working capital deficit was CAD 461.3 million, an increase from CAD 368.6 million in 2017[81]. - Total assets as of December 31, 2018, were CAD 779.3 million, compared to CAD 785.4 million at the end of 2017[180]. Corporate Governance - The company has maintained high standards of corporate governance, confirming compliance with the Hong Kong Stock Exchange's listing rules since its listing date in March 2012[38]. - The board of directors has established clear guidelines for matters requiring board approval, including the operating budget and capital expenditure budget[44]. - The company has received annual confirmation letters regarding the independence of all independent non-executive directors, affirming their independence under the listing rules[40]. - The company has not entered into formal appointment letters with its directors since its listing date, which deviates from the corporate governance code[39]. - The board has established various committees, including the audit committee and corporate governance committee, to oversee specific aspects of the company's affairs[39]. - The company has appropriate insurance arrangements for potential legal actions against its directors and senior management[45]. - The company has committed to regularly reviewing and updating its corporate governance practices to ensure the highest quality[40]. Future Outlook - The outlook for 2019 is positive due to stabilizing and gradually increasing international oil prices, with the company focusing on cost control and improving production performance at the West Ells project[21]. - The company aims to ensure the effective operation of Phase I of the West Ells facility and achieve the designed construction capacity while securing funding to support current operations and the expansion plans for Phase II of the West Ells project[22]. - The company plans to resume development in the Gordin area in 2019 under new ownership, with no costs borne by the company[179]. Shareholder Information - The board of directors is authorized to convene shareholder meetings, and shareholders holding at least 5% of voting shares can request a special meeting[93]. - The company has no provisions for preemptive rights in its articles of incorporation or bylaws[109]. - The company has a comprehensive compensation agreement for its directors, covering costs and expenses arising from their service[123]. - The company has adopted a dividend policy that considers operational performance, financial condition, cash needs, and any restrictions on dividend payments[98]. - The company will review its dividend policy periodically based on various factors[98].