Southern Pacific Selects BMO Capital Markets To Help Evaluate Financing Options for STP-McKay Project
July 16 2009 - 9:00AM
Marketwired
Southern Pacific Resource Corp. ("Southern Pacific" or the
"Corporation") (TSX VENTURE: STP) is pleased to announce the
appointment of BMO Capital Markets as its financial advisor to help
evaluate the options to finance construction of the Corporation's
first SAGD oil sands project.
Southern Pacific recently achieved a significant milestone with
the submission of the project application for its 80% owned 12,000
barrel per day STP-McKay Project on Alberta's Athabasca fairway.
The application was submitted to the Alberta Energy Resources
Conservation Board (ERCB) and Alberta Environment on May 29, 2009,
and was based upon the significant body of technical work completed
by the Corporation over the past 18 months. Now that this milestone
has been achieved, the Corporation is in a position to move forward
with a comprehensive evaluation of the financing options available
for the construction of the project.
BMO Capital Markets has been retained to provide strategic
advice and to assist in the evaluation of the financing options
available to the Corporation. These options include bank financing,
capital markets debt financing, equity financing or funding from a
joint venture partner. The STP-McKay Project is expected to require
gross capital expenditures of approximately C$400 million. Costs
have recently been declining in response to reduced industry demand
for services and the Corporation will update its capital cost
estimates as necessary.
Byron Lutes, the Corporation's President and CEO, said Southern
Pacific is pleased to formalize the excellent relationship
developed with BMO Capital Markets over the past year.
"Throughout the market downturn, we continued to advance our
STP-McKay Project and we're now ready to move into the project
execution phase," Mr. Lutes said. "Southern Pacific and BMO Capital
Markets will evaluate all of the options available to us, and we
will move forward with funding solutions that provide the best
value for our shareholders. We have a great project at STP-McKay
and are excited about moving into the next phase of the company's
development."
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.
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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