Southern Pacific Resource Corp STPJF

Project Cost and other Thoughts

[natureboy16]

I figure 10k bod pod to run around $325m.  Depends on steel prices and oil prices in how that affects contract and wage demands by the svc co's and workers working on the construction.

I hold more AOS than I do STP, but having said that, I see STP resource base being significantly bigger than AOS.  And that is without the ROH purchase.  That was a very, very smart and tasty purchase.  It is really a merger, but hey, whatever you want to call it really does not matter a whole lot.  The deal was very good for both parties.  ROH knew they were cut off from financing in the continuing CCrunch.  Rolling their shares into STP reflects the fact that both of them are catastrophically under priced.  The synergy of combination creates value for both players' shareholders.  The deal is not at all dilutive.  It is not really accretive, IMHO, but does create value in having more scale and more attraction value down the road.  The combination of the Christina lands with STP is especially important.  Looking at the data from STP suggests the possibility that the McMurray esturian channel may extend from the south part of STP's lands, right up through ROH's lands and ending in the north part of STP's lands.  Now that, if true, would be a grand slam home run for STP in of itself - not talking about all the other possible pod locations STP has in the works.

Before the deal, I saw STP worth around 3 bucks in current environment.  With this deal, including extra shares, I see value around 330 per share.  If sentiment were to return in a meaningful way, I could see an additional 50 to 100% on top of that. 

This is just all rank speculation on my part, and JMHO.

GL
nb

PS the next best deal is to merge with Patch in a share deal at equivalent of 35 cents per share, get rid of their team and just sit on the land till share prices reflect reality closer - ie. sentiment returns.  It will - I just don't know when.  In this credit market of credit contraction, that is very difficult to guage.  I think it will be sooner than later, but I have been thinking that for a while now.  My timing sucks.