Southern Pacific Completes Saxony Acquisition
30 April 2009 - 10:30PM
Marketwired
Southern Pacific Resource Corp. ("Southern Pacific" or the
"Corporation") (TSX VENTURE: STP) is pleased to announce the
completion of its previously announced acquisition of Saxony
Petroleum Inc. ("Saxony"), a private Alberta-based oil and gas
company. At the meeting of Saxony shareholders held April 29, 2009,
100% of the securities voted at the meeting were cast in favour of
the transaction.
As part of the transaction, Southern Pacific will acquire all of
the outstanding shares of Saxony on the basis of 0.8302 common
shares of Southern Pacific for each common share of Saxony, for a
total issuance of 14 million common shares of Southern Pacific.
After the transaction, Southern Pacific will have 121,611,182
common shares outstanding.
The acquisition of Saxony adds approximately 145 barrels of oil
equivalent per day (boe/d) to Southern Pacific's conventional
production. The new production is weighted about 75% to sweet
natural gas and the remainder to oil and natural gas liquids. When
added to the conventional volumes acquired through the recent
acquisition of Rochester Energy Corp., Southern Pacific expects its
current production to be approximately 180 boe/d. Southern Pacific
now holds more than 45,000 net acres of undeveloped land targeting
conventional production in Sutton, Sawn Lake, Brazeau and Adams in
west-central Alberta.
Southern Pacific believes the Transaction strategically
complements its primary business objective, namely the development
and exploitation of its 269 gross sections (225 net sections) of
oil sands leases in the Athabasca fairway. The Saxony assets
provide Southern Pacific with additional cash flow and
opportunities without any increase in general and administrative
expense.
As well, the Corporation is pleased to announce that Mr. Byron
Lutes, Southern Pacific's President, has accepted an enhanced role
as President and Chief Executive Officer ("CEO") and a seat on the
Board of Directors. Mr. Lutes joined the Corporation in January
2008 as President and has been a major contributor to the success
and progression of the Corporation, in particular in relation to
the development of Southern Pacific's first oil sands project, a
12,000 bbl/d steam assisted gravity drainage (SAGD) project called
STP-McKay. Mr. Dave Antony, who previously served as CEO, will
continue to be Chairman of the Board, allowing him to focus his
activities on pursuing the capital markets and financing options
necessary to complete the development of the Corporation's
STP-McKay Project.
Southern Pacific will be presenting in New York City on Monday,
May 4th, 2009 at the Raymond James Oil Sands of Canada Conference.
The presentation will be webcast and will be available shortly
afterward via a link on the Corporation's website
(www.shapcific.com). In preparation for this presentation, an
updated corporate presentation and fact sheet have been prepared
and are now available on Southern Pacific's website.
Readers' Advisory
Barrel of Oil Equivalent: Where amounts are expressed on a
barrel of oil equivalent ("boe") basis, natural gas volumes have
been converted to boe at a ratio of 6,000 cubic feet of natural gas
to one barrel of oil equivalent. This conversion ratio is based
upon an energy equivalent conversion method primarily applicable at
the burner tip and does not represent value equivalence at the
wellhead. Boe figures may be misleading, particularly if used in
isolation.
Safe Harbour
This news release contains certain "forward-looking information"
within the meaning of such statements under applicable securities
law including estimates as to: future production, operations,
operating costs, commodity prices, administrative costs, commodity
price risk management activity, acquisitions and dispositions,
capital spending, access to credit facilities, income and oil
taxes, regulatory changes, and other components of cash flow and
earnings anticipated discovery of commercial volumes of bitumen,
the timeline for the achievement of anticipated exploration,
anticipated results from the current drilling program and, subject
to regulatory approval and commercial factors, the commencement or
approval of any SAGD project.
Forward-looking information is frequently characterized by words
such as "plan", "expect", "project", "intend", "believe",
"anticipate", "estimate", "may", "will", "potential", "proposed"
and other similar words, or statements that certain events or
conditions "may" or "will" occur. These statements are only
predictions. Forward-looking information is based on the opinions
and estimates of management at the date the statements are made,
and are subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ
materially from those projected in the forward-looking statements.
These factors include the inherent risks involved in the
exploration and development of conventional oil and gas properties
and of oil sands properties, difficulties or delays in start-up
operations, the uncertainties involved in interpreting drilling
results and other geological data, fluctuating oil prices, the
possibility of unanticipated costs and expenses, uncertainties
relating to the availability and costs of financing needed in the
future and other factors including unforeseen delays. As an oil
sands enterprise in the development stage, with some conventional
production Southern Pacific faces risks including those associated
with exploration, development, start-up, approvals and the
continuing ability to access sufficient capital from external
sources if required. Actual timelines associated may vary from
those anticipated in this news release and such variations may be
material. Industry related risks could include, but are not limited
to, operational risks in exploration, development and production,
delays or changes in plans, risks associated to the uncertainty of
reserve estimates, health and safety risks and the uncertainty of
estimates and projections of production, costs and expenses. For a
description of the risks and uncertainties facing Southern Pacific
and its business and affairs, readers should refer to Southern
Pacific's most recent Annual Information Form. Southern Pacific
undertakes no obligation to update forward-looking statements if
circumstances or management's estimates or opinions should change,
unless required by law.
The reader is cautioned not to place undue reliance on this
forward-looking information.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Southern Pacific Resource Corp. Byron Lutes President
& CEO (403) 269-1529 Email: blutes@shpacific.com Southern
Pacific Resource Corp. Dave Antony Chairman (403) 269-5219 Email:
dantony@shpacific.com Website: www.shpacific.com
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