Southern Pacific Resource Corp. ("Southern Pacific" or the
"Corporation") (TSX VENTURE: STP) is pleased to announce the
completion of an independent reserves evaluation for its
conventional oil and gas reserves. The evaluation by GLJ Petroleum
Consultants ("GLJ") has recently been completed and is effective
June 30, 2009, which is the Corporation's fiscal year end. The
Report was prepared in accordance with National Instrument 51-101
("NI 51-101") using the assumptions and methodology outlined in the
Canadian Oil and Gas Evaluation Handbook ("COGEH").
Highlights
- Net present value (discounted 10 per cent before tax -
forecast prices) of $14.0million ($0.12 per Southern Pacific share)
attributed to its conventional proven-plus-probable reserves;
- Proven-plus-probable conventional recoverable reserves of 1.02
million barrels of oil equivalent;
- 45,000 net acres of undeveloped conventional acreage which has
had no value attributed to it;
- These reserves do not include the probable and possible
Reserves of 97.8 million barrels of bitumen, which are attributed
to the STP Mackay in-situ Oilsands assets and the net present value
(discounted 10 per cent before tax) on the bitumen reserves of
$301.0 million ($2.48 per Southern Pacific share).
Conventional Asset Evaluation:
Proved Total
Developed Proved
Proved Non- Proven Total Total plus
Producing producing Undeveloped Proved Probable Probable
MARKETABLE RESERVES
Light Medium Oil
(Mbbl)
Total Company
Interest 56 0 0 56 41 97
Working Interest 56 0 0 56 41 97
Net After Royalty 48 0 0 48 35 83
Heavy Oil (Mbbl)
Total Company
Interest 0.7 0 0 0.7 0.5 1.3
Working Interest 0.7 0 0 0.7 0.5 1.3
Net After Royalty 0.7 0 0 0.7 0.5 1.2
Gas (MMcf)
(MMcf)
Total Company
Interest 1,454 321 1,012 2,787 2,393 5,180
Working
Interest 1,452 239 1,012 2,704 2,375 5,078
Net After
Royalty 1,302 285 931 2,518 1,999 4,517
Natural Gas Liquids (Mbbl)
Total Company
Interest 24 1 15 40 36 76
Working Interest 24 1 15 40 36 75
Net After Royalty 16 1 11 28 24 52
Oil Equivalent
(Mbbl)
Equivalent
Total Company
Interest 323 54 184 561 476 1,037
Working Interest 323 41 184 547 473 1,020
Net After
Royalty 281 48 166 496 392 888
BEFORE TAX PRESENT VALUE (M$)
0% 8,418 1,353 1,804 11,575 13,336 24,910
5% 6,647 1,137 898 8,683 9,587 18,270
8% 5,892 1,033 516 7,441 8,119 15,559
10% 5,475 972 309 6,757 7,342 14,099
12% 5,114 917 133 6,164 6,687 12,851
15% 4,655 843 -85 5,413 5,877 11,290
20% 4,055 739 -355 4,439 4,855 9,294
(1) Probable reserves are those additional reserves that are less certain
to be recovered than proved reserves. It is equally likely that the
actual remaining quantities recovered will be greater or less than the
sum of the estimated Proved plus Probable reserves.
(2) Future net revenues associated with reserves and resources do not
necessarily represent fair market value.
(3) The estimates of reserves and future net revenue for individual
properties may not reflect the same confidence level as estimates of
reserves and future net revenue for all properties, due to the effects
of aggregation.
These conventional reserves were added to the Corporation's
asset base through two separate acquisitions completed earlier in
2009. Production from these reserves will be used to generate cash
flow through the interim period before Southern Pacific's first
in-situ oil sands project (STP-McKay) begins commercial production.
The STP-McKay oil sands project is a 12,000 bbl/d bitumen
production project that is currently in the approval process with
Alberta's regulatory bodies. For more details on the STP-Project,
please refer to Southern Pacific's website at www.shpacific.com.
Southern Pacific also carries significant bitumen reserves on its
oil sands leases; please refer to the Corporation's press release
dated July 13(th), 2009 for full details.
In addition to the reserves added, the two acquisitions added 50
sections of oil sands leases which were complimentary to Southern
Pacific's existing oil sands leases. This brings the Corporations
total oil sands lease inventory to 269 sections, with an averaged
working interest of 84%. Also the acquisitions added 45,000 acres
of undeveloped conventional land, primarily in Alberta. The
Corporation is currently offering this land for farm out to several
interested parties and has already secured certain deals, including
the drilling of a horizontal oil well on its Sawn Lake lands by a
significant Canadian oil and gas company scheduled to be drilled
this winter.
Southern Pacific is a full cycle oil and gas exploration and
production company focused on the development of the Corporation's
vast in-situ oil sands resource base in Alberta's Athabasca oil
sands region.
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.
Definitions
"Probable reserves" means those additional reserves that are
less certain to be recovered than proved reserves. It is equally
likely that the actual remaining quantities recovered will be
greater or less than the sum of the estimated Proved plus Probable
reserves.
"Proved reserves" means those reserves that can be estimated
with a high degree of certainty to be recoverable. It is likely
that the actual remaining quantities recovered will exceed the
estimated Proved reserves.
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 blutes@shpacific.com Southern Pacific
Resource Corp. Dave Antony Chairman 403-269-5219
dantony@shpacific.com www.shpacific.com
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