GREY:STPJF - Post by User
Post by
dman34on Oct 19, 2010 9:46am
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Post# 17581238
From this mornings Canaccord Morning Coffee...
From this mornings Canaccord Morning Coffee...
Southern Pacific Resource* (STP : TSX : $1.38), Net Change: 0.08, % Change: 6.15%, Volume: 4,315,106
Does STP stand for Scientifically Treated Petroleum? Southern Pacific, an emerging oil sands company, has received Order in Council approval from the Government of Alberta for their 12,000 bbl/d SAGD project at McKay. The approval allows Southern Pacific to forge ahead with construction at McKay. The company had already begun work on constructing the all season access road to the McKay lease back in September. The company is now in a position to begin plant construction at McKay this winter. The company expects to complete the project in late 2011 with first steam in the ground in early 2012.
Additionally, the approval enables the company to seek a credit rating and begin work on its proposed debt issue. The company formally appointed a syndicate of financial advisors back in August as part of their process to obtain ~$300 million in debt financing for McKay. The company previously raised $108 million in equity back in April and hopes to pre-fund the rest of the capital requirements with high yield or term loan debt. Canaccord Genuity Oil & Gas Analyst Steve Toth believes the successful conclusion of this process will be the major catalyst for the stock and could transpire before year end. GLJ Petroleum Consultants have assigned 56.8 mmboes as proven undeveloped reserves effective October 15, 2010. The assignment is primarily focused around the initial development areas where there is a high degree of confidence.