Southern Pacific plans to continue to provide monthly operational updates to its shareholders, with the next update to occur on or about May 9, 2013, with the release of its fiscal Q3 2013 financial and operating results (quarter ending March 31, 2013). An updated corporate presentation is now available on Southern Pacific’s website at www.shpacific.com.
STP-McKay Thermal Project
March production averaged approximately 1,000 barrels of bitumen per day (bbl/d). Month-over-month production volumes were lower as a result of downtime from previously planned maintenance and from deliberate production restrictions on several steam-assisted gravity drainage (SAGD) well pairs. Daily volumes ranged from lows of 650 bbl/d while maintenance operations were conducted to highs of 1,300 bbl/d as wells were placed back into production. Production restrictions were put in place through most of March on some of the well pairs in order to continue developing steam chamber conformance while protecting wellbore integrity. Southern Pacific expects these well pairs to be placed back into full SAGD production through April and May, as these adjustments were part of the overall reservoir management program aimed at optimizing long term rates and recovery. Planned maintenance that was conducted in March included a routine inspection and clean out of both pads’ test and group separators, in addition to the replacement of failed thermocouple strings on four separate well pairs. To date, eight of the 12 well pairs have been converted to SAGD production. In the latter part of March an additional well pair was converted to full-time SAGD, bringing the total to five well pairs on full-time SAGD production. Of the remaining seven wells, three SAGD well pairs are periodically returned to circulation (semi-SAGD) and four wells remain in the steam circulation phase.
As the Company has previously stated, it is expected to take up to 18 months from first oil production, which commenced in mid-October 2012, for total rates to approach the 12,000 bbl/d design capacity.
STP-Senlac Thermal Project
Production at STP-Senlac averaged approximately 2,800 bbl/d for March, up approximately 15% from the prior month. The start-up of Pad K was initiated in January with circulation steaming in the first well pair. Permanent surface facilities were completed on March 4th. The first of three well pairs was placed on production on March 9th, with the next well pair scheduled for a mid-April start-up and the final well pair expected to start in June as capacity becomes available. The next planned phase of SAGD well pairs is expected to spud this fall following regulatory approval and be on production early 2014.
About Southern Pacific
Southern Pacific Resource Corp. is engaged in the exploration, development and production of in-situ thermal heavy oil and bitumen production in the Athabasca oil sands of Alberta and in Senlac, Saskatchewan. Southern Pacific trades on the TSX under the symbol “STP.”
Advisory
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 and lending costs, 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, but are not limited to the inherent risks involved in the exploration and development of oil and gas properties and of oil sands properties, delays in ramp-up operations, the uncertainties involved in interpreting drilling results and other geological data, fluctuating oil prices and discounts, 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, Southern Pacific faces risks including those associated with exploration, development, ramp-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.
Southern Pacific Resource Corp.
Greg Foofat
Investor Relations
403-930-5621
gfoofat@shpacific.com
www.shpacific.com