Southern Pacific Resource Corp STPJF

Energy Oil & Gas E&P

Southern Pacific Resource Corp. is a Canada-based company, which is engaged in the thermal production of heavy oil in Senlac, Saskatchewan on a property known as STP-Senlac, and thermal production of bitumen on a property located in the Athabasca region of Alberta known as STP-McKay, as well as exploration for and development of in-situ oil sands in the Athabasca region of Alberta. Its STP-McKay property consists of oil sands leases totaling approximately 37,760 acres. The Company’s operations also include Anzac, Hangingstone and Ells. The Company’s STP-McKay property is located approximately 45 kilometers northwest Ft. McMurray. The Anzac project covers approximately 117 kilometers of two-dimensional (2D) seismic. The Company owns 80% interest in Hangingstone project. The Ells project covers approximately 164 kilometers of two-dimensional (2D) seismic.

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Southern Pacific Resource Corp > Scurvy be damned!!!

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Comment by Eyeinvestoron May 09, 2014 10:07am

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RE:Scurvy be damned!!!

ShatnersRug wrote:
Eyeinvestor is absolutely right!

I was convinced that a deal was in the works because of the cost to the company involved in delaying Senlac. However, we're not looking at a joint venture at all. A JV at McKay has nothing to do with Senlac's operations. Why would a capex freeze for STP as a whole be in place?

A sale is the only reason for Senlac's halt in prepping Pad L.

BINGO! Shat wins the Ace Ventura Pet Detective award.

Now as we think this through. There are some more clues out there. Eye think we can start to narrow down some of the purchaser suspects and determine whether the negotiations are favoring the buyer or the seller (STP).... but we start to enter the realms of speculative guesswork here...so don't hold me to this.

The big question is Why? Wheye a total sale of the company and not just a sale of part of McKay? In the long run, a JV in McKay would make more money for shareholders so we would prefer that. Management and Board keep their jobs so eye suspect they would prefer the McKay JV option. From the buyers side, why would anyone want to buy the whole company?????? The interesting asset is McKay. Senlac is just a boring producing asset that is in decline. It has a worth but any buyer is primarily going to be interested in McKay. Surely, there is only one reason that the whole company is being sold. The only reason eye can think of is that someone wants all of Mckay! If they want all of Mckay and are prepared to make the "offer you cant refuse"...then there is no reason for STP to continue to exist so we might as well throw in Senlac and sell the whole damn thing. Okay, lets put that piece of the puzzle to one side for now.

Let's look at the potential purchasers. It would make the most sense for Brion, the Chinese owned tar sands venture. They are right next door. They are embarking on a multi-billion dollar SAGD project in the same geology. The proprietary knowledge base that STP has gained with its successes and failures over the past 18 months would be worth hundreds of millions to Brion. In addition all of the hardware on the STP Mckay steam plant site is worth real dollars to Brion because the plant is close enough for steam to be piped to Brion McKay. They have VERY DEEP POCKETS and they clearly believe in McKay sand because they have voted with their wallet. I think we can safely assume they put in a bid.

Now the final piece in this very speculative puzzle is that a Chinese owned company cannot currently acquire more than 50% of tar sand resources.

So.....why is the whole company being sold? Shat I will leave you the honor of putting the pieces together.