US Oil Sands Inc. announced that it has completed a detailed review of its PR Spring Phase 1 Project in light of continued low oil prices and the closure of two key contractors' Utah-based operations. Construction of the Project is approximately 85% complete with costs coming in below budget. However since additional capital will be required for commissioning, start-up and continued operations thereafter to validate the proprietary bitumen extraction process technology, the Company has decided to reduce the pace of field construction in order to maintain working capital flexibility.

As the Company has not completed its previously-announced $10 million royalty financing, US Oil Sands will be pursuing other financing options including the possibility of equity financing. As US Oil Sands is in the pre-production stage, low oil prices do not impact the company's current financial position. The low price environment has impacted the Project as two of the company's key contractors have closed their operations in Utah and have caused delays to the Project.

Project work will continue at a reduced level, and is expected to focus on critical path items and areas that will lead to the most efficient restart of full construction operations in the future. In spite of delays and increased costs that will occur with restart of full construction operations, the Company is still targeting completion within the original $60 million approved budget.