Southern Pacific Completes Their Winter Exploration Program
March 19 2008 - 9:00AM
Marketwired
CALGARY, ALBERTA (TSX VENTURE: STP) is pleased to announce the
successful completion of its winter seismic and corehole drilling
program. Overall, Southern Pacific is very excited about the work
that has been completed on its project lands. In just 17 months
since its entry into the oilsands, Southern Pacific has accumulated
219 gross sections of oilsands leases, where it has an 80% working
interest, shot 678 kilometers of 2D seismic, 20 square kilometers
of 3D seismic and has drilled a total of 87 core holes on its
oilsands leases. Through this process, four project areas have been
identified on Southern Pacific's leases. Southern Pacific plans to
move forward as expeditiously as demonstrated in the past with the
prioritization and development of its projects, as well as its
continued exploration program in order to identify new project
areas on its leases.
At McKay, Southern Pacific has drilled a total of 32 core holes
to date on its 59 section block. Two potential project areas have
been identified over the past winter and as a result the drilling
program was adjusted to focus on this block in order to obtain as
much information on the potential projects as possible. In the
McKay North project area, the Corporation was able to increase the
drilling density to over 4 wells per section. Over the two project
areas, McKay North and McKay South, the core drilling program
encountered gross bitumen zones between 26 and 30 meters thick, and
continuous net bitumen zones between 12 and 27 meters thick. The
zone porosity ranges from 30% to 35%. In addition, the core holes
did not show any evidence of gas or water thief zones that could
technically impair SAGD viability. A significant amount of
technical data was obtained this winter including 32 full diameter
cores over the prospective oilsands horizons, which will be fully
analyzed. Downhole formation imaging logs, pressure tests, fluid
analyses and warm cap rock cores were also acquired. Plans are now
being made to initiate the necessary environmental testing, develop
a comprehensive consultation program, and begin the process of
preparing an application for a SAGD project. Once the technical
data has been completely analyzed and interpreted, Southern Pacific
will provide an update on the scope and timing of its McKay
projects.
At Leismer, a 3D seismic program was shot in January over the
area that was successfully drilled last year. The data was
interpreted and the Corporation drilled another 12 core holes in
addition to the 17 core holes drilled in this area during the prior
year drilling season. Of the 12 core holes, 6 were drilled on the
3D seismic program and 6 were drilled on the southern portion of
the block based on 2D seismic data. Gross bitumen zones of 25 to 42
meters thick were encountered and continuous net bitumen zones of
10 to 18 meters thick were encountered within the 3D seismic area.
These results, combined with last winter's drilling results in the
same area, have confirmed a potential SAGD project area. Of the 6
exploration core holes drilled to the south on 2D seismic, two
solid leads were identified and will be used to plan next winter's
appraisal program in Leismer.
At Long Lake, Southern Pacific drilled a total of 8 core holes
anchored on the 88 km of 2D seismic shot last summer and vintage
wells in the area. Of these, 6 of the core holes encountered
significant bitumen zones. The gross bitumen zones were between 18
to 38.5 meters thick, and net continuous bitumen zones between 15
to 29.5 meters thick. There are top gas and bottom water issues to
deal with on this block; however, Southern Pacific believes it has
identified a project area. Further delineation of the project will
be planned for next winter.
At Hangingstone, Southern Pacific drilled a total of 18 core
holes this winter on its 64 section block. Using the 175 km of 2D
seismic shot last summer as a guide to spot the locations on this
unexplored block of land, Southern Pacific found prospective leads
in 10 of the 18 core holes. Gross bitumen zones between 10 to 34
meters thick and net continuous bitumen zones between 9 to 15
meters thick were encountered in these 10 wells. This block is
still relatively unexplored, and an expanded exploration program
for this area is planned for next winter, keying off the results of
this year's program.
At Kirby, Southern Pacific shot 87 km of 2D seismic at the start
of this winter. This data was then interpreted and several leads
were identified and targeted for drilling. However, due to the
weather related late start on the rest of the program, it was
decided to defer the drilling of this block until next winter
rather than risk building the winter access roads and not be able
to complete the program due to spring break up.
Total net capital expenditures including all seismic acquired in
the past 12 months and core hole drilling are approximately $53.4
million. This will leave approximately $18.5 million of working
capital at March 31, 2008.
Since December 2007, the Corporation has shot 20 square
kilometers of 3D seismic, 87 kilometers of 2D seismic, this is in
addition to the 539 kilometers of 2D seismic the Corporation shot
and interpreted in the fall of 2007, and drilled 70 core holes over
various portions of its 219 gross sections of oilsands leases.
Originally, the Corporation planned to drill 115 core holes,
however the program had to be reduced due to the weather shortening
the drilling season. Warm weather delayed the initiation of the
program in December and therefore increased the drill site and
access road construction costs. The bitter cold experienced in
early February shut most operations down for another week. Finally,
a projected early break up necessitated a decision to end the
drilling program about one week earlier than last year.
Southern Pacific will complete the analysis and interpretation
of all technical data collected this past winter, prioritize the
potential project areas and begin the process of preparing a SAGD
application for one or more of the projects. In concert with
Southern Pacific's internal technical review and planning, McDaniel
and Associates are now underway preparing the estimate of bitumen
resources for the Corporation. Their final estimates will be done
prior to Southern Pacific's year end of June 30, 2008.
Southern Pacific is also pleased to announce that an updated
corporate presentation is available on our website at
www.shpacific.com
Safe Harbour
This news release contains certain "forward-looking information"
within the meaning of such statements under applicable securities
law including: 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 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, the Corporation 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. For a description of the risks and uncertainties facing
the Corporation and its business and affairs, readers should refer
to the Corporation's most recent Annual Information Form. The
Corporation 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 forward-looking statements.
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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