Southern Pacific Successfully Completes Winter Program
February 26 2009 - 8:00AM
Marketwired
Southern Pacific Resource Corp. (TSX VENTURE: STP) is pleased to
report that its winter program has been completed under budget and
with encouraging results.
Southern Pacific's 2008/2009 winter program marks the completion
of all the winter field work required to submit an application to
the Alberta Energy Resources Conservation Board (ERCB) for a 12,000
barrel per day (bbl/d) in-situ steam-assisted gravity drainage
(SAGD) project. The STP-McKay project is located on the Athabasca
fairway 50 km northwest of Fort McMurray.
Highlights of the winter program at STP-McKay include the
following:
- Drilled 21 stratigraphic test holes within the project area.
This brings the total number of delineation wells around the six
square mile project area to 43, providing excellent control for
exploitable bitumen mapping, and for the orientation of the first
proposed phase of SAGD well pairs. The exploitable bitumen resource
encountered by the 21 new wells came in better than expected, and
the areal extent of exploitable bitumen has been extended. This is
expected to result in an increase of exploitable bitumen when the
independent engineers review the results this spring. Net pays of
exploitable bitumen ranged from 12 to 24 meters, with only two
wells encountering a thickness of less than 12 meters. As per the
previous year's results, no significant steam thief zones or shale
barriers were encountered. The information gathered this winter has
further delineated the extent of its reservoir and has confirmed
the viability of the STP-McKay project.
- Drilled and successfully tested two water source wells. Based
on initial results, these wells will be more than sufficient to
provide the water requirements for the SAGD project. Southern
Pacific has been working over the past several months in a working
group organized by the Canadian Association of Petroleum Producers
(CAPP) to comment on the newly proposed ERCB's draft directive:
Requirements for Water Measurement, Reporting and Use for Thermal
In Situ Oil Sands Schemes. After a thorough review of the draft
directive, Southern Pacific is confident STP-McKay will meet or
exceed all of the proposed guidelines.
- Completed a geo-technical analysis of the plant and pad sites.
Earth samples of the plant and well pad sites and surrounding
samples were extracted to confirm site integrity and sources of
fill material. Preliminary results support the sites selected with
only minor modifications.
- Completed additional cap rock integrity analysis. Preliminary
analysis of the cap rock program results support sufficient cap
rock integrity which will meet all the ERCB requirements for the
STP-McKay project.
The entire winter program was completed six days ahead of
schedule and approximately 8% under budget, including two
additional delineation wells.
Concurrent with the field work, Southern Pacific has continued
to consult directly with aboriginals, public stakeholders and
regulatory agencies. Based on feedback to date, there have been no
significant issues brought forth and Southern Pacific expects to
complete its consultation in advance of the project application
submission. Southern Pacific has developed and received approval
from Alberta Environment on its Aboriginal Consultation Plan and
has also been exempted under the Environment Protection and
Enhancement Act (EPEA) from requiring an environmental impact
assessment (EIA) report. The consequence of these approvals is that
Southern Pacific now has in place a more definitive time-frame
around the application process schedule.
Southern Pacific will now finalize the analysis and collation of
the data, and prepare its application for the STP-McKay SAGD
project. The application is on track to be submitted in the second
quarter of 2009. Southern Pacific will have sufficient working
capital at June 30, 2009 to allow the company to continue to
administer the application through the regulatory process and to
look for additional opportunities for growth.
Southern Pacific's financial and operating results for the
Second Quarter ended December 31, 2008 are now available on the
company's website and on SEDAR at www.sedar.com.
Safe Harbour
Statements in this press release may contain forward-looking
information including expectations of future 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.
The reader is cautioned that assumptions used in the preparation of
such information may prove to be incorrect. Events or circumstances
may cause actual results to differ materially from those predicted,
a result of numerous known and unknown risks, uncertainties, and
other factors, many of which are beyond the control of the company.
These risks include, but are not limited to, the risks associated
with the oil and gas industry, commodity prices and exchange rate
changes. 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. The
reader is cautioned not to place undue reliance on this
forward-looking information.
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release.
Contacts: Southern Pacific Resource Corp. Dave Antony CEO (403)
269-5219 Email: dantony@shpacific.com Southern Pacific Resource
Corp. Byron Lutes President (403) 269-1529 Email:
blutes@shpacific.com Website: www.shpacific.com
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