Southern Pacific Provides Operational Update on Its McKay and Senlac Thermal Projects
16 December 2009 - 1:00AM
Marketwired
Southern Pacific Resource Corp. ("Southern Pacific" or the
"Company") (TSX VENTURE: STP) is pleased to provide an update on
activity in its core operating areas, namely its STP-McKay and
STP-Senlac thermal projects, as well as its upcoming winter
corehole program.
STP-McKay Thermal Project
On December 7, 2009, the Energy Resources Conservation Board
(ERCB) issued a document entitled Supplemental Information Request
("SIR") to Southern Pacific pertaining to its STP-McKay Thermal
Project application submitted on May 29, 2009. This is the standard
process by which the ERCB requests additional information on all
oil sands project applications. The SIR was issued six months from
the date the application was submitted, which is consistent with
the anticipated timeline.
Southern Pacific is of the opinion that no significant issues
with the application have been identified by the SIR. Southern
Pacific had previously received Alberta Environment's SIR related
to the application. In the Company's opinion, these questions
similarly did not contain any significant concerns. Southern
Pacific is in the process of responding to the SIRs.
Because no material questions have been raised in the ERCB and
Alberta Environment SIRs, the Company is moving aggressively
towards completing a Front End Engineering and Design (FEED) study
on the STP-McKay Thermal Project. The FEED study is being prepared
by a team of 20 engineering and design professionals. When
completed in the first quarter of 2010, the FEED study will fulfil
all the engineering required to commence the ordering of equipment
and ultimately the construction of the project. Construction is
scheduled to begin in the fall of 2010.
Southern Pacific is pleased to report that the STP-McKay Thermal
Project development timeline is proceeding as expected.
STP-Senlac Thermal Project
The Senlac Thermal Project, acquired on November 4, 2009, has
now been fully integrated into Southern Pacific, resulting in one
month's production and cash flow. The property averaged 5,081
barrels per day in November despite having approximately three days
of downtime due to an anomalous power disruption at a nearby
SaskPower substation. Cash flow is estimated to exceed $6.0 million
for November.
Southern Pacific believes the benefits of operating its own
steam assisted gravity drainage (SAGD) production at Senlac have
already become apparent. Several key engineers from the STP-McKay
FEED study team have spent time at the Senlac Thermal Project,
discussing operational items with the experienced staff on site.
The collaboration of people and comparisons between the Senlac and
McKay designs will undoubtedly create an even better product when
STP-McKay begins construction next year.
2009-10 Winter Exploration Program
Southern Pacific and its 20% working interest partner, Bounty
Developments Ltd., have commenced this winter's exploration program
with ice road construction already underway. The program will be
carried out on two of Southern Pacific's six oil sands leases,
namely Hangingstone and McKay South. Each program will consist of
approximately 20 coreholes. The objective of the program is to
identify at least one new project area from which to begin making
plans for another thermal project. Both of these programs have been
designed based on strong potential shown from the Company's
existing seismic and corehole data. The program is expected to cost
about $8.0 million (net) and will be funded entirely from cash
flow.
New Staff
Southern Pacific is also pleased to announce that over the past
month the Company has hired four new managers. Wayne Beatty
(Manager, Reservoir Engineering), Adrian Dodds (Manager,
Operations), Chad Harris (Manager, Geosciences) and Troy Bergfeldt
(Controller) have joined the Southern Pacific team. The Company
looks forward to their contributions as it continues to grow.
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, 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 any current or projected 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, 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 blutes@shpacific.com Southern Pacific
Resource Corp. Dave Antony Chairman 403-269-5219
dantony@shpacific.com www.shpacific.com
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